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Business

Accounting

why would a corporate entity mark up inventory when selling on an intercompany basis?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter10: Inventory

Section: Chapter Questions

Problem 5Q: When would a company use the specific identification method of inventory cost allocation?

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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.

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How does the inventory method chosen can have a significant effect on the amount of income reported by the company to external parties?
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