If items are shipped FOB shipping suggest, then the _____ (purchaser/seller) is responsible for paying freight charges and also the _______________ (purchaser/seller) will certainly not encompass the merchandise in their inventory.
You are watching: Which of the statements below explain why lcm is used? (check all that apply.)
If products are shipped FOB shipping suggest, then the *PURCHASER is responsible for paying freight charges and also the *SELLER will certainly not incorporate the merchandise in their inventory.
The _____ principle says that inventory expenses are expensed as expense of products offered once inventory is sold.
The EXPENSE RECOGNITION principle says that inventory prices are expensed as expense of items offered as soon as inventory is offered.
Why would certainly the physical count of inventory be various than what is displayed in perpetual inventory records? (Check all that use.)
Which of the complying with lists the 4 techniques offered to asauthorize expenses to inventory and also to cost of goods sold?
The FIFO cost circulation presumption assumes that the expense of items purchased _______________ (earliest/latest) are the expenses that will be moved initially to cost of products marketed on the _______________ (balance sheet/revenue statement).
The FIFO cost flow presumption assumes that the expense of items purchased EARLIEST are the expenses that will certainly be moved first to cost of items sold on the INCOME STATEMENT
Which of the prices below would certainly be had in the tape-recorded price of merchandise inventory? (Check all that apply.)
Which statement(s) below appropriately describe(s) the connection of expense of items offered and ending inventory? (Check all that use.)
Cost of goods sold plus ending inventory will equal the total items easily accessible for sale. Cost of goods obtainable for sale have to be alsituated in between price of products sold and also ending inventory.
Which statement(s) below is(are) correct concerning the purpose of taking a physical inventory count? (Check all that apply.)
The physical count is used to adjust the Inventory account balance to the actual inventory easily accessible. The physical count is provided to identify if tbelow has actually been any type of theft, loss, damages or errors in inventory.
The sort of business that would certainly use the particular identification approach of inventory costing includes:
Recount the techniques used to assign expenses to inventory and cost of products marketed under both a perpetual and a routine mechanism. (Check all that apply.)
One similar unit is purchased on each of the following three days and at the particular costs: June 1 at $10 June 2 at $15 July 4 at $20 The agency sells two devices during the period. Conclude which inventory items are offered first and which unit continues to be in finishing inventory if the firm is making use of the FIFO price flow assumption.
Identify the safeguards that service providers implement to safeguard their inventory. (Check all that use.)
Implement protection measures, such as camages.Restrict access to inventory.Control access to inventory documents.Match inventory received via purchase orders.
Exsimple what reduced of price or industry suggests in regards to reporting merchandise inventory on the balance sheet.
Determine which of the adhering to statements are correct concerning the difference between physical flow and also the price circulation of inventory. (Check all that use.)
Cost flow is an presumption around which goods/items are marketed. A organization may take on any expense flow assumption once accounting for perishable items. Perishable items must have an actual physical circulation of FIFO. Physical flow is focused on the actual movement of goods.
Guns R Us overdeclared its finishing inventory in the existing year by $5,000. The firm erroneously reported $100,000 of net revenue. Explain the consequences of this error on the current period"s revenue statement.
There are advantages to using each of the four inventory costing approaches. Identify the statements listed below that are correct about these benefits. (Check all that apply.)
Weighted average often tends to smooth out erratic transforms in expenses. FIFO asindications an amount to inventory on the balance sheet that approximates its existing price.
Accounting values require conservatism when reporting financial indevelopment. Companies never want to report inventory on a balance sheet that is better than replacement cost. Assets are not displayed at an inflated value on the balance sheet, but fairly at reduced of price or replacement expense. LCM permits companies to recognize a loss in value of an asset in the period the loss occurs.
Determine cost of goods sold for X-mart, assuming that beginning inventory was $5,000. Net purchases were $20,000 and also ending inventory was $9,000.
Sparky"s wrongly consisted of inventory that was on consignment in its finishing inventory count. Consequently, the finishing inventory was overstated on the balance sheet. Exsimple how this error will certainly impact this year"s revenue statement. (Check all that use.)
When purchase prices are (rising/declining) , FIFO will report the lowest price of products sold yielding the highest possible gross profit and also net earnings.
When purchase costs are RISING, FIFO will report the lowest cost of items offered yielding the highest possible gross profit and also net earnings.
The inventory turnover ratio assesses exactly how easily a agency is offering its merchandise, so that it deserve to generate cash to pay debts.
Estimates of inventory are not commonly forced when a company offers a (FIFO/LIFO/periodic/perpetual) inventory device because they would presumably have actually updated inventory information.
Quotes of inventory are not commonly required as soon as a firm uses a PERPETUAL inventory device because they would certainly presumably have updated inventory data.
Assuming purchase expenses are rising in a routine inventory system, identify which of the statements listed below are correct concerning the price of products sold under FIFO, LIFO and also weighted average price circulation methods. (Check all that use.)
Companies making use of FIFO will report the smallest price of items offered.Weighted average expense of products sold will certainly be between FIFO and also LIFO prices of items marketed.Companies using FIFO will certainly report the highest possible gross profit and net earnings.Companies making use of FIFO will certainly pay better taxes than carriers utilizing LIFO, assuming all else being equal.
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Sometimes suppliers should estimate finishing inventory. Review the reasons provided below for estimating inventory and pick every one of the correct responses. (Check all that apply.)
Fire ruined the inventory warehome. Interim financial statements need to be prepared. The store was flooded.
Corporate Finance (The Mcgraw-Hill/Irwin Series in Finance, Insurance, and Real Estate)11th EditionBradford D. Jordan, Randolph W. Westerarea, Stephen A. Ross