Th e Industry and Business Risk excerpt states that, “Increased competition may lead tolower unit sales and excess production capacity and excess inventory. Th is may result in afurther downward price pressure.” Th e downward price pressure could lead to inventorythat is valued above current market prices or net realizable value. Any write-downs ofinventory are least likely to have a significant eff ect on the inventory valued using:A. weighted average cost.B. first-in, first-out (FIFO).C. last-in, first-out (LIFO).

Q: 1. When applying lower of cost or market, market value A. is defined as the selling price B.…

A: This Net realizable value(NRV) generally a common method used in valuation of an asset in inventory…

Q: A positive price-to-book ratio indicates something is wrong with a company's use of its assets. True…

A: In the world of finance and investing, numerous metrics and ratios are utilized to evaluate the…

Q: Proponents of the LIFO Inventory cost flow assumption argue that this costing method is superior to…

A: LIFO is one of the inventory methods used to account for inventory. Here the inventory of the…

Q: Marco Company shows the following costs for three jobs worked on in April. Balances on March 31…

A: Factory overhead refers to the indirect cost incurred in a factory for the production of goods where…

Q: The margin of safety can be defined as the amount by which sales can decrease before losses are…

A: Total sales of a company can be divided into Margin of safety sales and break even sales.

Q: Q2. Which of the following inventory valuation methods typically results in the highest reported…

A: B) Last - In, First - Out (LIFO)Explanation:LIFO (Last-in, First-out) is typically used during…

Q: In an inflationary economy, the use of FIFO maximizes the cost of goods sold and minimizes the cost…

A: In an inflationary economy, the prices of goods keep on rising until the economy slows down. Thus,…

Q: Which of the following change in regulations is most likely to improve internal market efficiency…

A: Market is considered as efficient only if: Intrinsic Value = Stock price Stock prices fully relects…

Q: Which of the following is not a disadvantage of using the FIFO cost flow assumption? includes all…

A: Lets understand the basics.There are various methods follow to calculate inventory balance. It…

Q: Which of the following statements are true? Multiple Cholce none of the statements are true The…

A: The 2 statement is not true, as higher the number of days sales in receivable indicates that the…

Q: H5. Which of the following is not a criteria that's used to pick your trading comparables?…

A: we will discuss the criteria used to select trading comparables for financial analysis and identify…

Q: . Which of the following costs will tend to increase if a firm switches to a restrictive short-term…

A: Answer: The correct option would be option C (I, III, and IV only). Introduction: Restrictive policy…

Q: Evaluate different types of risk and costs if the financial director proposed to reduce inventory.…

A: The current ratio is computed by dividing current assets by current liabilities. The acid test ratio…

Q: Is this statement true or false? please explain in detail The Discounted Cash Flow method is the…

A: The value of an investment is calculated using the discounted cash flow (DCF) approach based on the…

Q: If one firm is growing rapidly and another is not, how might this distort a comparisonof their…

A: It is a financial measure that is used to evaluate as to how many times a company sells or uses its…

Q: Which of the following is NOT one of the uses of moving averages by technical analysts? A. To…

A: Note:- As per guidelines, when multiple questions asked under single question. We are only…

Q: During a period of rising inventory prices, a company's cost of goods sold would be higher using the…

A: LIFO means last in first out where as FIFO means first in first out.Inventory and cost of goods sold…

Q: In a single period inventory model, it is optimal to order MORE than the expected demand if the cost…

A: A single inventory model, often referred to as a single item or single-product inventory model, is a…

Q: Which of the following performance measures will increase if inventory decreases and all else…

A: Return on investment measures the net earned on the assets employed by the business.

Q: A negative trend in Gross Margin may indicate that Cost of Sales is decreasing.  Group of answer…

A: Introduction: Formula: Gross margin = sales - cost of goods sold. Deduction of cost of goods sold…

Q: the margin of safety is the reduction in sales that can occur before the break-even point is…

A: Approach to solving the question: Detailed explanation:Limitations of relying on a margin of safety…

Q: Explain how LIFO, FIFO, and Weighted average inventory systems will have different affects on a…

A: FIFO (First in first out) method makes the assumption that inventory items that are purchased first…

Q: Assuming rising inventory prices, which statement is correct? Group of answer choices A. FIFO…

A: INTRODUCTION: First in, first out, or FIFO, is a technique of valuing assets or inventories. The…

Q: Which of the following statements is true?

A: Companies tries to use the methods of the inventory valuation so that the tax liability of the…

Q: Which of the following is true about the quick ratio? It is a liquidity ratio. O It measures the…

A: The Acid-Test ratio, which is another name for the Quick Ratio, is a financial indicator that…

Q: Very high inventory turnover ratio relative to industry norms could possibly indicate the company…

A: The objective of the question is to understand the implications of a very high inventory turnover…

Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.