When inventory is adjusted down, what is the impact on the balance sheet? a. The value of the asset, Merchandise Inventory, is restated at a more conservative number. b. The value of the asset, Merchandise inventory, is increased to reflect a more optimistic outlook. c. The value of the liability, Selling Expense, would be decreased to reflect a more conservative outlook. d. The value of the liability, Operating Expenses, would be increased to reflect the loss. You are an accountant for ACME Corporation working on inventory valuation. What would prevent you from using LCNRV to adjust the value of your inventory? a. If ACME uses NIFO. b. If ACME uses LIFO to cost inventory. c. If ACME uses FIFO to cost inventory. d. If the Cost of Goods Sold exceeds last quarter’s COGS.
When inventory is adjusted down, what is the impact on the balance sheet? a. The value of the asset, Merchandise Inventory, is restated at a more conservative number. b. The value of the asset, Merchandise inventory, is increased to reflect a more optimistic outlook. c. The value of the liability, Selling Expense, would be decreased to reflect a more conservative outlook. d. The value of the liability, Operating Expenses, would be increased to reflect the loss. You are an accountant for ACME Corporation working on inventory valuation. What would prevent you from using LCNRV to adjust the value of your inventory? a. If ACME uses NIFO. b. If ACME uses LIFO to cost inventory. c. If ACME uses FIFO to cost inventory. d. If the Cost of Goods Sold exceeds last quarter’s COGS.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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When inventory is adjusted down, what is the impact on the balance sheet ?
a. The value of the asset, Merchandise Inventory, is restated at a more conservative number.
b. The value of the asset, Merchandise inventory, is increased to reflect a more optimistic outlook.
c. The value of the liability, Selling Expense, would be decreased to reflect a more conservative outlook.
d. The value of the liability, Operating Expenses, would be increased to reflect the loss.
You are an accountant for ACME Corporation working on inventory valuation . What would prevent you from using LCNRV to adjust the value of your inventory?
a. If ACME uses NIFO.
b. If ACME uses LIFO to cost inventory.
c. If ACME uses FIFO to cost inventory.
d. If the Cost of Goods Sold exceeds last quarter’s COGS.
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