Which of the following statements about the use of the FIFO assumption is NOT true?   a.   The FIFO assumption assigns the more recent purchase costs to the balance sheet inventory asset account.   b.   The FIFO assumption is not affected by the inventory control method.   c.   In periods of rising prices it produces a higher profit than LIFO.   d. The FIFO assumption produces inventory asset values that are based on older purchase

Q: Which of the following statements is correct with respect to inventories? The FIFO cost flow…

A: Inventory can be defined as the stock of goods or products that is manufactured and stored by the…

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A: Step 1The correct option is C. Replacement cost". The lower of price or market (LCM) technique is…

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: 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…

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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: To hold back unrealized profit in ending inventory, cost of goods sold is decreased. True or False?

A: Unrealized profits in the literal sense means those profits that are not realized yet. Unrealized…

Q: Which of the following statements about the LIFO Reserve Disclosure is NOT true?  a. Usually, FIFO…

A: The credit balance in the LIFO reserve reports the difference since the time that LIFO was adopted.…

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Q: a) Compare the periodic versus the perpetual system as a control device. b) What sort of…

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

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A: LCM (Lower of Cost or Market) approach:   It is an approach that values the inventory at historical…

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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 is true regarding LIFO and FIFO? A) In a period of decreasing costs, LIFO…

A: First in first out is also written as FIFO and last in first out is also written as LIFO. These are…

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

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Q: Compare the financial effects (ignore income tax) of using the FIFO and average inventory cost…

A: FIFO FIFO Means First in, First Out. It is one of the Important Method of Valuation of Inventory.…

Q: Do you agree with the following statements? Express your opinion on each statement. An inventory…

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Q: In a period of falling prices, which inventory method would result in the lowest tax burden? a.…

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Q: Which inventory method will result in lower net income in a period of rising prices? Which inventory…

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A: Net realizable value: Net realizable value is the net amount of receivables which a business expects…

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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.