Which of the following statements is correct? Group of answer choices A)The choice of an inventory costing method is dependent upon the actual physical flow of the inventory. B)LIFO should be used during a period of increasing prices when the objective is to maximize the ending inventory value on the balance sheet. C)FIFO should be used during a period of decreasing prices when the objective is to maximize the gross profit reported on the balance sheet. D)The average cost method will result in an ending inventory balance which is somewhere between LIFO and FIFO when inventory prices are changing.

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: 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: Which of the following variations of the reail inventory method would generally result in the lowest…

A: FIFO is a method used to value inventories. In First-In-First-Out (FIFO) method the cost of the…

Q: The inventory valuation method that has the advantages of assigning an amount to inventory on the…

A: Inventory means the stock of goods in hand . Goods means the thing in which the business deals and…

Q: Lower of cost and net realizable value a. results in the lowest valuation if applied to the total…

A: It is preferable to value the inventory at lower of cost or net realizable value (LCNRV) in…

Q: When inventory is purchased in a basket purchase, several steps are required. Which of the following…

A: A basket purchase is a term used to indicate when two or more items are purchased together for a…

Q: Please answer in detail and tell me why other options are incorrect........   The most useful…

A: Following methods are used to find the valuation of the ending inventory 1) FIFO - First in first…

Q: Which of the following is an advantage of the periodic inventory system?A. frequent physical…

A: When a physical inventory count is performed, a periodic inventory system just updates the ending…

Q: During a period of rising inventory prices the LIFO cost flow method will result in higher total…

A: LIFO means last in first out which means that newest inventory will be sold first , where as FIFO…

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: Describe costing inventory using weighted average. Address the different treatment, if any, that…

A: Weighted average cost method of inventory valuation is one of the 3 methods of accounting inventory.…

Q: The number of units that a company should add to inventory with each order to minimize the total…

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Q: Give examples of costs included in annual carrying costs of inventory when using the EOQ decision…

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Q: In a period of rising costs, which inventory valuation method would a company likely choose if they…

A: The objective of the question is to identify the inventory valuation method that would result in the…

Q: After companies apply one of the four costing methods, Inventory is reviewed to ensure it is…

A: The cost of inventory is the amount spent to acquire or produce it, including expenses such as…

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: Discuss the effect of absorption and marginal costing on inventory valuation and profit…

A: Absorption costing also written as full costing. Under this method, all costs are considered in…

Q: There are numerous inventory costing methods including FIFO, LIFO, and Weighted Average methods.…

A: Ans. There are 3 methods to value inventory and these are FIFO, LIFO and weighted average. Different…

Q: The cost method that will yield an ending inventory value that is somewhere between possible high…

A: Inventory valuation has 4 Methods - 1. FIFO 2. LIFO 3. Weighted Average 4. Specific Identification…

Q: When using the periodic inventory system, which inventory costing method(s) always produces the same…

A: Under the periodic inventory system. the inventory is counted usually at the end of the period and…

Q: The most common approach to implementing the lower of cost or market rule for inventory valuation is…

A: Inventory means the stock of goods in which the businessmen deals. Inventory is always valued at…

Q: Under which of the following inventory costing methodologies can lower-of-cost-or-market be use

A: Inventory, based on its intended use and where it is in the manufacturing or distribution process.…

Q: Discuss the effect of absorption and marginal costing on inventory valuation and profit…

A: Lets understand the basics. Generally one of the two costing methods are followed by entities to…

Q: What is inventory shrinkage? The difference between product cost and retail selling price. The…

A: Inventory shrinkage refers to the discrepancy between the perpetual system generated Inventory level…

Q: What does a very high inventory turnover ratio signify? Please provide your own example to explain…

A: Inventory turnover ratio is one of the efficiency ratio, which says and calculates how many times…

Q: Question 10 Inventory costing methods are based on assumptions about: Neither flow of costs or…

A: The selection of an inventory method depends on different factors of the organization, such as the…

Q: When inventory items are highly specialized, the best inventory costing method is ________.A.…

A: Inventory is one of the important current asset for the business. Management and valuation of…

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

A: First-in-First-Out (FIFO): In this method, items purchased initially are sold first. So, the value…

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: The answer is d, ex In a period of rising prices, the inventory method which tends to report the…

A: Inventory can be valued using various methods -First-in First-Out Method - Under the First-in…

Q: Ward Hardware does not expect costs to change dramatically and wants to use an inventory costing…

A: Perpetual Inventory System is an accounting system of valuing the inventory where there is a need…

Q: Explain briefly the application of the LCM rule to ending inventory. Describe its effect on the…

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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.