Principles of Accounting Volume 1
19th Edition
ISBN: 9781947172685
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 10, Problem 7MC
Which accounting rule serves as the primary basis for the lower-of-cost-or-market methodology for
A. conservatism
B. consistency
C. optimism
D. pessimism
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Which one of the following sets of inventory cost flow assumptions is not susceptible to profit manipulation by management?
a. FIFO and specific identification
b. LIFO and average cost
c. FIFO and average cost
d. LIFO and specific identification
The application of the lower of cost or market rule to inventory valuation is an example of
a. the revenue realization principle
b. the going concern assumption
c. special industry practices
d. conservatism
the lower cost or market is a method of inventory valuation true or false?
Chapter 10 Solutions
Principles of Accounting Volume 1
Ch. 10 - If a company has four lots of products for sale,...Ch. 10 - If a company has three lots of products for sale,...Ch. 10 - When inventory items are highly specialized, the...Ch. 10 - If goods are shipped FOB destination, which of the...Ch. 10 - On which financial statement would the merchandise...Ch. 10 - When would using the FIFO inventory costing method...Ch. 10 - Which accounting rule serves as the primary basis...Ch. 10 - Which type or types of inventory timing system...Ch. 10 - Which of these statements is false? A. If cost of...Ch. 10 - Which inventory costing method is almost always...
Ch. 10 - Which of the following describes features of a...Ch. 10 - Which of the following financial statements would...Ch. 10 - Which of the following would cause periodic ending...Ch. 10 - Which of the following indicates a positive trend...Ch. 10 - What is meant by the term gross margin?Ch. 10 - Can a business change from one inventory costing...Ch. 10 - Why do consignment arrangements present a...Ch. 10 - Explain the difference between the terms FOB...Ch. 10 - When would a company use the specific...Ch. 10 - Explain why a company might want to utilize the...Ch. 10 - Describe the goal of the lower-of-cost-or-market...Ch. 10 - Describe two separate and distinct ways to...Ch. 10 - Describe costing inventory using first-in,...Ch. 10 - Describe costing inventory using last-in,...Ch. 10 - Describe costing inventory using weighted average....Ch. 10 - How long does it take an inventory error affecting...Ch. 10 - What type of issues would arise that might cause...Ch. 10 - Explain the difference between the flow of cost...Ch. 10 - What insights can be gained from inventory ratio...Ch. 10 - Calculate the goods available for sale for...Ch. 10 - Company accepts goods on consignment from R...Ch. 10 - The following information is taken from a companys...Ch. 10 - Complete the missing piece of information...Ch. 10 - Akira Company had the following transactions for...Ch. 10 - Akira Company had the following transactions for...Ch. 10 - Prepare journal entries to record the following...Ch. 10 - Calculate the cost of goods sold dollar value for...Ch. 10 - Calculate the cost of goods sold dollar value for...Ch. 10 - Calculate the cost of goods sold dollar value for...Ch. 10 - Prepare journal entries to record the following...Ch. 10 - Prepare Journal entries to record the following...Ch. 10 - If a group of inventory items costing $15,000 had...Ch. 10 - If Wakowski Companys ending inventory was actually...Ch. 10 - Shetland Company reported net income on the...Ch. 10 - Compute Altoona Companys (a) inventory turnover...Ch. 10 - Complete the missing pieces of McCarthy Companys...Ch. 10 - Calculate the goods available for sale for Soros...Ch. 10 - X Company accepts goods on consignment from C...Ch. 10 - Considering the following information, and...Ch. 10 - Complete the missing piece of information...Ch. 10 - Bleistine Company had the following transactions...Ch. 10 - Bleistine Company had the following transactions...Ch. 10 - Prepare journal entries to record the following...Ch. 10 - Calculate the cost of goods sold dollar value for...Ch. 10 - Calculate the cost of goods sold dollar value for...Ch. 10 - Calculate the cost of goods sold dollar value for...Ch. 10 - Prepare journal entries to record the following...Ch. 10 - Prepare journal entries to record the following...Ch. 10 - If a group of inventory items costing $3,200 had...Ch. 10 - If Barcelona Companys ending inventory was...Ch. 10 - Tanke Company reported net income on the year-end...Ch. 10 - Compute Westtown Companys (A) inventory turnover...Ch. 10 - Complete the missing pieces of Delgado Companys...Ch. 10 - When prices are rising (inflation), which costing...Ch. 10 - Trini Company had the following transactions for...Ch. 10 - Trini Company had the following transactions for...Ch. 10 - Calculate the cost of goods sold dollar value for...Ch. 10 - Use the first-in, first-out (FIFO) cost allocation...Ch. 10 - Use the last-in, first-out (LIFO) cost allocation...Ch. 10 - Use the weighted-average (AVG) cost allocation...Ch. 10 - Prepare journal entries to record the following...Ch. 10 - Calculate a) cost of goods sold, b) ending...Ch. 10 - Calculate a) cost of goods sold, b) ending...Ch. 10 - Calculate a) cost of goods sold, b) ending...Ch. 10 - Compare the calculations for gross margin for A76...Ch. 10 - Company Elmira reported the following cost of...Ch. 10 - Assuming a companys year-end inventory were...Ch. 10 - Use the following information relating to Shana...Ch. 10 - Use the following information relating to Clover...Ch. 10 - When prices are falling (deflation), which costing...Ch. 10 - DeForest Company had the following transactions...Ch. 10 - DeForest Company had the following transactions...Ch. 10 - Calculate the cost of goods sold dollar value for...Ch. 10 - Use the first-in, first-out method (FIFO) cost...Ch. 10 - Use the last-in, first-out method (LIFO) cost...Ch. 10 - Use the weighted-average (AVG) cost allocation...Ch. 10 - Prepare journal entries to record the following...Ch. 10 - Calculate a) cost of goods sold, b) ending...Ch. 10 - Calculate a) cost of goods sold, b) ending...Ch. 10 - Calculate a) cost of goods sold, b) ending...Ch. 10 - Compare the calculations for gross margin for B76...Ch. 10 - Company Edgar reported the following cost of goods...Ch. 10 - Assuming a companys year-end inventory were...Ch. 10 - Use the following information relating to Singh...Ch. 10 - Use the following information relating to Medinas...Ch. 10 - Assume your company uses the periodic inventory...Ch. 10 - Consider the dilemma you might someday face if you...Ch. 10 - Use a spreadsheet and the following excerpts from...
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Considering the following information, and applying the lower-of-cost-or-market approach, what is the correct value that should be reported on the balance sheet for the inventory?arrow_forwardWhich income statement account(s) would be affected by a policy choice at the same time as the inventory balance sheet account. a. Bad debts expense b. Cost of goods sold expense c. Depreciation or amortisation expense d. Sales revenuearrow_forwardUnder IFRS, which of the following methods is not acceptable for the valuation of inventory? a. LIFO. b. FIFO. c. Average cost. d. Specific identificationarrow_forward
- Applying the lower-of-cost-or-market approach, what is the correct value that should be reported on the balance sheet for the inventory?arrow_forwardWhat method of inventory valuation should be used for economic decision-making problems?arrow_forwardWhich of the following is not a disadvantage of the LIFO inventory cost flow assumption? a. The impact of LIFO liquidation profits b. It does not match the most recent costs with revenue c. The possibility of income manipulation by management d. It impairs comparability between companies using LIFOarrow_forward
- What is the dollar-value method of LIFO inventory valuation?What advantage does the dollar-value methodhave over the specific goods approach of LIFO inventoryvaluation? Why will the traditional LIFO inventory costingmethod and the dollar-value LIFO inventory costingmethod produce different inventory valuations if thecomposition of the inventory base changes?arrow_forwardThe taxable income of Jenny for first week of January 2021 was R3 220. She did not earn overtime pay or any other remuneration. Her weekly pension deduction was R280. Her other deductions amounted to R800. Which one of the following statements is true? Select one: O A. Her contribution to the pension fund was 8% of her normal pay. O B. Her net wage was R2 140. O C. Her gross wage was R4 300. D. Her gross wage for January 2021 was higher than her basic wage.arrow_forwardWhich U.S. GAAP principle or rule would apply if the net realizable value of acompany’s inventory is below its original cost?a. Lower-of-cost-or-market ruleb. Consistency principlec. Disclosure principled. Historical cost principlearrow_forward
- Which Inventory Valuation method gives the highest profit when inventory costs are rising? a. Weighted Average b. FIFO c. It is not possible to calculate which methd gives highest profit d. LIFOarrow_forwardWhich method results in a balance sheet valuation of inventory method farthest away from its economic value? Select one: a. FIFO b. LIFO c. Weighted Average PreviousSave AnswersNextarrow_forwarda. What is the estimated cost of the ending inventory if the conservative approach was used? b. What is the estimated cost of the ending inventory if the average cost approach was used? c. What is the estimated cost of the ending inventory if the FIFO approach was used? Please present the solution in good accounting form.arrow_forward
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