How might a company simplify its use of the NRV method when final selling prices can vary sizably in an accounting period and management frequently changes the point at which it sells individual products?

Q: What is the main difference between a perpetual inventory system and a periodic inventory system?…

A: Inventory can be valued under two methods. 1. perpetual inventory method 2. Periodic inventory…

Q: Indicate whether a company interested in minimizing its income taxes should choose the FIFO orLIFO…

A: FIFO - First In First Out LIFO - Lase In First Out

Q: What effect does each method used have on the firm’s reportedprofits? On ending inventory levels?

A: Answer: The following is the effect that each method of inventory on firms reported profits:…

Q: The level of inventory a company maintains has important economic consequences, and it involves…

A: Ending inventory refers to the inventory which is left at the end of the accounting period. This…

Q: In what ways would a reduction in inventory help the company

A: Inventory refers to all the items, goods, merchandise, and materials held by a business for selling…

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

A: The periodic and perpetual inventory Systems are two systems used to track the quantity of goods…

Q: Which of the following is not a disadvantage of the LIFO inventory cost flow assumption? a. The…

A: LIFO is the Last in first out method of inventory which says that inventory purchased last should be…

Q: In calculating inventory turnover, why is cost of goods sold used as the numerator? As the inventory…

A: Inventory turnover ratio:Inventory turnover ratio is used to determine the number of times inventory…

Q: A company's inventory cost was lower in FIFO than it would have been using LIFO. Assuming no…

A: Inventory is the stock of goods with the company which is ready to sell out. It covers large…

Q: Which of the following statements regarding the lower of cost and net realizable value (LCNRV) rule…

A: The rule of valuing the inventory at cost or net realizable value is also called as Prudence concept…

Q: A decision about one product is said to have ________ effects when a change in the sales of one…

A: A decision about one product is said to have ________ effects when a change in the sales of one…

Q: Which of the following choices correctly denotes factors that can influence a company's pricing…

A: Pricing a product or service is an important task for every organisation. It is the basis for the…

Q: Sales Returns Which of the following statements is true relating to the allowance for sales returns?…

A: Sales return & allownace :— It is the amount of goods returned by customer due to receive of…

Q: Why would a company choose to use an inventory costing method that estimates the cost of the goods…

A: In this question, we  explain that why would a company choose to use an inventory costing method…

Q: Name the accounting principle that requires inventories to be reported at sales price less…

A: Conservatism Principle This is the concept that you should record expenses and liabilities as soon…

Q: Which one of the following variables is not explicitly considered in the computation of the Economic…

A: Economic Order Quantity is entity's optimal order quantity to minimize total costs retated to…

Q: Which ratio can provide an indication of the salability of the company's products?

A: Accounting ratios, often known as financial ratios, describe the correlations between the figures on…

Q: How can a company track the extent of price discounting on a customer-by-customer basis?

A: Customer Profitability Analysis:Customer profitability analysis is the process of ascertaining the…

Q: Which statements below are true? 1. LCM and LCNRV may be applied by individual products, by…

A:

Q: How would your error affect breakeven sales and operating income under the proposed sales commission…

A: Affect of error on break-even sales and operating income:

Q: The inventory turnover ratio a. measures management’s ability to productively employ all of…

A: No, option “d” is not the correct answer.

Q: Which of the following statements is correct?a. Sales returns and allowances increase a company’s…

A:

Q: Compare the periodic versus the perpetual system as a control device.

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: Why does the sales value at splitoff method use the sales value of the total production in the…

A: Split-off Point: Split-off point is the point in production process where joint products are capable…

Q: Under generally accepted accounting principles, a company can choose among different cost flow…

A: Consistency principle: The consistency rule expresses that, when you embrace a bookkeeping rule or…

Q: If a company returns an item to a supplier, the supplier will record the return as: shrinkage. O a…

A: The item purchased by the company from the supplier is Purchase for the company and Sales for the…

Q: Determine which one of the following statements is correct: O a. Achange in the sales mix will…

A: The breakeven point is the point where a company does not have any profit and loss from their sales,…

Q: How should accounting be able to catch up with the high sales return rates, particularly on…

A: Inventory management: Inventory management can be defined as a system to measure and record the…

Q: Which of the following statements is true with regard to the gross profit ratio? An increase in…

A: Gross profit is an excess amount of revenue over its cost of goods sold.it measures profitability…

Q: Which of the following statements is true regarding the lower of cost or net-realizable value (NRV)?…

A: Inventory means the stock of goods in which the businessmen deals. Every company wants to maintain…

Q: Which one of the following is a reason for the just- in-time inventory policy? Select one: A. The…

A: Just in time inventory policy means purchasing the inventory when ever required and not maintaining…

Q: Why would a company’s manager be concerned about the quantity of its purchases returns if its…

A: Purchase returns means return of merchandise to the suppliers or vendors due to low quality or any…

Q: a. Income manipulation is difficult under LIFO. b. Accounting principles do not require that the…

A: The right answer is option b. Accounting principles do not require that the inventory cost flow…

Q: What is the purpose of the lower of cost or net realizable value rule?

A: lower of cost or net realizable value rule(LCNRV method):Inventory should be valued at the lower of…

Q: Th e Industry and Business Risk excerpt states that, “Increased competition may lead tolower unit…

A: If prices are decreased, write downs under FIFO are least probably to have a considerable impact 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.