Which of the following may not result to the amount of cost of sales? a.Net purchases less net increase in inventory b.Net decrease in inventory plus net purchases

Q: When there are no inventory at the beginning or at the end of the period, the total purchases will…

A: The total purchase amount is the price agreed upon by the buyer and seller for an item, including…

Q: If ending inventory is understaffed for year 1, then in year 2…. A. Costa of goods sold and gross…

A: Inventory is the term used in accounting which refers to the goods as well as materials that the…

Q: Assuming no beginning inventory, what is the trend of inventory prices if cost of goods sold…

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

Q: When net realizable value is lower than cost, and the loss method applying the…

A: As per Accounting Standards on Inventory valuation, each item of inventory is calculated at cost or…

Q: A company records inventory at gross invoice price. Theoretically, how should the following affect…

A: Solution: Interest on inventory loan do not affect cost of inventory, it is working capital loan…

Q: 22.Which inventory costing method has a stabilizing effect on profit, such that during a period of…

A: There are four Methods of issue of material  1.First-in, first-out method 2.  Last-in, first-out…

Q: (True or False) Cost of sales, under the periodic system, is calculated as inventory at start (plus…

A: Periodic Inventory System - Under periodic inventory system cost of goods sold will be calculated at…

Q: 3. Indicate the effect of the following errors on gross profit and cost of goods sold (COGS), i.e.,…

A: Solution Concepts Purchase account is an expense and if it is understated profit will increase and…

Q: Which of the following statements is incorrect? Group of answer choices A)Ending inventory exceeds…

A: a) Cost of goods sold= Opening inventory + Purchases - Ending inventory Lets take a example…

Q: If the inventory is valued at cost and the price level is steadily increasing, which type of…

A: Under FIFO, goods that are purchased initially are sold first, however, under LIFO it is assumed…

Q: If the dollar amount in ending accounts payable is greater than the dollar amount in beginning…

A: Solution- Accounts payable are amounts due to vendors or suppliers for goods or services received…

Q: Which of the following statements is incorrect?

A: Cost of Goods Sold: Cost of Goods sold is the Cost of the items that are sold it is calculated for…

Q: FAST PLZ - Which of the following element of cost is important in calculating the cost of closing…

A: Cost of goods sold means the cost incurred on the manufacturing or purchase of goods which has been…

Q: gross profit method assumes

A: The gross profit technique calculates the value of inventory by combining current period data on net…

Q: T, F. Under the GAAP rule, inventories can be reported at above cost in the balance sheet. T, F. If…

A: Under GAAP rules , inventory is valued at cost or net realizable value which ever is lower due to…

Q: Cost of goods sold is equal to a. total goods available for sale minus ending inventory. b. total…

A: Formula: Cost of goods available for sale = Beginning inventory + net purchases

Q: Which of the following is the same as 'net realisable value' of inventory?   a. proceeds of sale…

A: The question is multiple choice question  Required  Choose the Correct Option.

Q: Assume that a firm separately determined inventory under FIFO and LIFO and then compared the…

A: FIFO is a method of costing inventory in which the inventory purchased first is out first for…

Q: In a peiod of rising prices, which method would yield the lowest ending inventory, highest net…

A: The inventory valuation method used to evaluate the closing inventory and cost of goods sold on the…

Q: 4. Using the FIFO method, the most recent purchases of inventory are assumed to be contained: a. on…

A: Under FIFO method, units purchased earlier are assumed to be sold first and the ending inventory…

Q: Johnson would like to know the inventory turnover ratio. You may tell Johnson to a. Divide cost of…

A: Inventory turnover ratio provide the number of times inventory comes and is sold in a year.

Q: What is the effect on the cost of goods sold, gross profit, and net income if ending merchandise…

A: Ending inventory is the value of inventory available on hand at the end of the accounting period.

Q: amount of cost of sales?

A: (Note: Since you have posted multiple questions, we will solve the first question for you. For the…

Q: Cost of Gross Sales Goods Sold Profit (Loss) Net Ending Beg Inventory Purchases Inventory Net Sales…

A: Formulas: Gross profit = Net sales - Cost of goods sold

Q: Which one of the following statements is true? a. Under conditions of rising prices, the LIFO…

A: Step 1    Last in, first-out (LIFO) is inventory method in which the costs of the most recent…

Q: When there are no inventory at the beginning or at the end of the period, the total purchases will…

A: Cost of sales means actual cost of goods that is being sold to the customers. It includes beginning…

Q: An increase in the inventory turnover rate is indicative of: Multiple Choice a decrease in the cost…

A: Inventory turnover rate is calculated as ratio of cost of goods sold and inventory

Q: 55. Why is inventory, end is included in the computation of net income? * O A. To determine cost of…

A: Solution: Cost of goods sold = Beginning inventory + Purchases - Ending inventory Inventory, end is…

Q: inventory is added to Total Goods Available for Sale when computing for Cost of Goods Sold. True F

A: Solution: False. The statement that Ending inventory is added to Total Goods Available for Sale when…

Q: When determining gross profit, only the following items must be taken into consideration:    A.…

A: Gross Profit is the revenue earned by the company after subtracting the cost associated with earning…

Q: Under which inventory cost flow assumption is the cost of the most recent purchase matched first…

A: >There are various method that can be sued to record the flow of cost to match with the sales…

Q: The gross profit method assumes O The beginning inventory plus purchases equal total goods to be…

A: The gross profit indicates the excess amount of revenue over the cost of goods sold and available…

Q: The journal entry to record a write-down of inventory from cost to its lower market value includes…

A: Inventory is very important current asset for the business. As per accounting standards, inventory…

Q: Allowance Method in accounting for inventory write-down

A: Statement I is correct because Allowance method is required to be followed in accounting for…

Q: Are all the relationships below correct? Sales is equal to Production (no change in inventory) No…

A: "Since you have asked multiple sub part question we will solve the first three sub part question for…

Q: How are intercompany sales eliminated? Select one: a. Decrease Parents inventory and Subsidiary…

A: When one company or its subsidiary company , hold more than 50% share in another company , then…

Q: Which of the following is not a step in the retail inventory method process? a.Compute the cost of…

A: The question is based on the concept of Cost Accounting.

Q: Which of the following regarding the lower of cost ormarket rule for inventory are true?(i) The…

A: Option c is correct.

Q: How would the following transactions affect the current ratio and the acid-test ratio? (a) Purchase…

A: Current ratio is the ratio between the current assets and current liabilities. It shows the…

Q: answer the following regarding inventories.   The inventory costing method which in a period of…

A: The correct Answer is Last-in, First-out (LIFO) Method

Q: In a period of falling prices, the use of which inventory cost flow method would typically result in…

A: The inventory valuation is done at the end of the accounting period. Different techniques are…

Q: 3. Indicate the effect of the following errors on gross profit and cost of goods sold (COGS), i.e.,…

A: Cost of goods sold (COGS)- The cost incurred on the goods sold during the period is referred to as…

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.