Identify the option which is correct regarding the primary purpose of inventory cash flow assumption.

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 8, Problem 1STQ

To determine

Identify the option which is correct regarding the primary purpose of inventory cash flow assumption.

Expert Solution & Answer

Answer to Problem 1STQ

b. Offset against revenue an appropriate cost of goods sold.

Explanation of Solution

Cost flow assumptions can be referred to as the method which determines the flow of costs when an inventory is sold. Instead of keeping a track record for cost of each product sold, a company adopts these methods, and identifies which units were sold. Then, this calculated cost of goods sold is deducted from the revenue to ascertain the operating revenue of business.

Cash flow assumptions differ from specific identification method because the actual physical movement of goods may be unrelated to the flow of costs.

Option “a, c, and d” are not correct answer as per above explanation, only option “b” is correct answer as per above explanation. Hence, the correct answer is option b.

Conclusion

Therefore, the correct option is (b), offset against revenue an appropriate cost of goods sold.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Need help this question

Hi expert please help me this question general accounting

Please give me answer general accounting question

Answer 2

Question

Chapter 8, Problem 1STQ

To determine

Identify the option which is correct regarding the primary purpose of inventory cash flow assumption.

Expert Solution & Answer

Answer to Problem 1STQ

b. Offset against revenue an appropriate cost of goods sold.

Explanation of Solution

Cost flow assumptions can be referred to as the method which determines the flow of costs when an inventory is sold. Instead of keeping a track record for cost of each product sold, a company adopts these methods, and identifies which units were sold. Then, this calculated cost of goods sold is deducted from the revenue to ascertain the operating revenue of business.

Cash flow assumptions differ from specific identification method because the actual physical movement of goods may be unrelated to the flow of costs.

Option “a, c, and d” are not correct answer as per above explanation, only option “b” is correct answer as per above explanation. Hence, the correct answer is option b.

Conclusion

Therefore, the correct option is (b), offset against revenue an appropriate cost of goods sold.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 8, Problem 1STQ

To determine

Identify the option which is correct regarding the primary purpose of inventory cash flow assumption.

Expert Solution & Answer

Answer to Problem 1STQ

b. Offset against revenue an appropriate cost of goods sold.

Explanation of Solution

Cost flow assumptions can be referred to as the method which determines the flow of costs when an inventory is sold. Instead of keeping a track record for cost of each product sold, a company adopts these methods, and identifies which units were sold. Then, this calculated cost of goods sold is deducted from the revenue to ascertain the operating revenue of business.

Cash flow assumptions differ from specific identification method because the actual physical movement of goods may be unrelated to the flow of costs.

Option “a, c, and d” are not correct answer as per above explanation, only option “b” is correct answer as per above explanation. Hence, the correct answer is option b.

Conclusion

Therefore, the correct option is (b), offset against revenue an appropriate cost of goods sold.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 8, Problem 1STQ

To determine

Identify the option which is correct regarding the primary purpose of inventory cash flow assumption.

Expert Solution & Answer

Answer to Problem 1STQ

b. Offset against revenue an appropriate cost of goods sold.

Explanation of Solution

Cost flow assumptions can be referred to as the method which determines the flow of costs when an inventory is sold. Instead of keeping a track record for cost of each product sold, a company adopts these methods, and identifies which units were sold. Then, this calculated cost of goods sold is deducted from the revenue to ascertain the operating revenue of business.

Cash flow assumptions differ from specific identification method because the actual physical movement of goods may be unrelated to the flow of costs.

Option “a, c, and d” are not correct answer as per above explanation, only option “b” is correct answer as per above explanation. Hence, the correct answer is option b.

Conclusion

Therefore, the correct option is (b), offset against revenue an appropriate cost of goods sold.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 8, Problem 1STQ

To determine

Identify the option which is correct regarding the primary purpose of inventory cash flow assumption.

Expert Solution & Answer

Answer to Problem 1STQ

b. Offset against revenue an appropriate cost of goods sold.

Explanation of Solution

Cost flow assumptions can be referred to as the method which determines the flow of costs when an inventory is sold. Instead of keeping a track record for cost of each product sold, a company adopts these methods, and identifies which units were sold. Then, this calculated cost of goods sold is deducted from the revenue to ascertain the operating revenue of business.

Cash flow assumptions differ from specific identification method because the actual physical movement of goods may be unrelated to the flow of costs.

Option “a, c, and d” are not correct answer as per above explanation, only option “b” is correct answer as per above explanation. Hence, the correct answer is option b.

Conclusion

Therefore, the correct option is (b), offset against revenue an appropriate cost of goods sold.

Answer 6

Chapter 8, Problem 1STQ

To determine

Identify the option which is correct regarding the primary purpose of inventory cash flow assumption.

Expert Solution & Answer

Answer to Problem 1STQ

b. Offset against revenue an appropriate cost of goods sold.

Explanation of Solution

Cost flow assumptions can be referred to as the method which determines the flow of costs when an inventory is sold. Instead of keeping a track record for cost of each product sold, a company adopts these methods, and identifies which units were sold. Then, this calculated cost of goods sold is deducted from the revenue to ascertain the operating revenue of business.

Cash flow assumptions differ from specific identification method because the actual physical movement of goods may be unrelated to the flow of costs.

Option “a, c, and d” are not correct answer as per above explanation, only option “b” is correct answer as per above explanation. Hence, the correct answer is option b.

Conclusion

Therefore, the correct option is (b), offset against revenue an appropriate cost of goods sold.

Answer 7

Chapter 8, Problem 1STQ

To determine

Identify the option which is correct regarding the primary purpose of inventory cash flow assumption.

Answer 8

Expert Solution & Answer

Answer to Problem 1STQ

b. Offset against revenue an appropriate cost of goods sold.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Explanation of Solution

Cost flow assumptions can be referred to as the method which determines the flow of costs when an inventory is sold. Instead of keeping a track record for cost of each product sold, a company adopts these methods, and identifies which units were sold. Then, this calculated cost of goods sold is deducted from the revenue to ascertain the operating revenue of business.

Cash flow assumptions differ from specific identification method because the actual physical movement of goods may be unrelated to the flow of costs.

Option “a, c, and d” are not correct answer as per above explanation, only option “b” is correct answer as per above explanation. Hence, the correct answer is option b.