The major criticism of the lower of cost or market rule for valuation of inventory is that

Q: Disregarding the special circumstances when bases other than the point of sale are used, discuss the…

A: Revenue recognition is a generally accepted accounting principle (GAAP) that states the conditions…

Q: Classify each of the following accepted accounting practices as conservative or aggressive.1. Use…

A: Conservative Accounting– Conservative accounting practice means use of the technique for…

Q: Which one of the following sets of inventory cost flow assumptions is not susceptible to profit…

A: FIFO and average cost methods are considered as the sets of inventory cost flow assumptions that are…

Q: Using the Traditional Sales Comparison Approach, an appraiser would not adjust the sales price of…

A: Traditional Sales Comparison Approach: It is referred to as the sales comparison methodology in real…

Q: Income can be distorted by factors other than inflation. The most important causes of distortion for…

A: Ratio analysis is the calculation of different ratios from the financial statements.

Q: Borrowing costs a. None of these answers are correct. b. must only be included in inventory cost if…

A: Borrowing costs refer to the interest and other costs incurred by a company when it borrows funds to…

Q: Which of the following is not a disadvantage of the LIFO inventory cost flow assumption? a. The…

A: LIFO is the Last in first out method of inventory which says that inventory purchased last should be…

Q: The historical cost principle provides that: Select one: O a. the recorded amount of an acquired…

A: Accounting principles are the rules required to be followed by the company in the process of…

Q: When sales are made with a right of return, the company_ а. should recognize revenue for the full…

A: The revenue would be posted in the income statement of the company. The expenses are deducted form…

Q: Explain the lower of cost or market rule for inventory valuation and explain why it is GAAP.

A: Lower of cost or market value for inventory valuation is just a mixture of many accounting…

Q: I'm interested by the LIFO technique of inventory valuation. It seems unreasonable for all…

A: Introduction: The LIFO inventory system is one in which the inventories that are the last in the…

Q: the lower cost or market is a method of inventory valuation true or false?

A: Inventory valuation is the accounting process in which the monetary value assigned to the unsold…

Q: According to PAS 18 Revenue, which of the following is not a criterion to be satisfied before…

A: As Per PAS 18, Criteria of Revenue recognition is as follows: The outcome of the transaction is…

Q: Under IFRS, which of the following methods is not acceptable for the valuation of inventory? a.…

A:

Q: The application of the lower of cost or market rule to inventory valuation is an example of a. the…

A: The valuation of inventory is done at lower of cost or net realisable value as per relevant…

Q: Rustic Company has recognized an impairment loss on the value of inventory. If the inventory's value…

A: there is difference in the requirement of and recording of inventory as per ifrs and US GAAP . gaap…

Q: The use of alternative accounting methods:

A: Ratio analysis: Ratio analysis is a tool that establishes a relationship between the different…

Q: Where there is evidence that the utility of inventory goods, as part of their disposal in the…

A:

Q: The core difference between the rational entity impairment model (IFRS) and the cost recovery…

A: International Financial Reporting Standards (IFRS): IFRS are a set of international accounting…

Q: Which of the following statements about fair value is true? Fair value accounting is also known as…

A: The objective of this question is to identify the correct statement about fair value in accounting.

Q: is it true that the inventory is a liability on its balance sheet?

A: Inventory is the array of finished goods by the company which the company aims to sell and earn a…

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.