Chapter 11: Inventory Cost Flow Flashcards
To identify the cost formulas required by IFRS To apply the FIFO cost formula To apply the weighted average cost formula To apply the moving average cost formula To apply the specific identification method
1
Q
T/F
IFRS does not permit the use of LIFO but only US GAAP.
A
TRUE
2
Q
2 Cost formulas in computing Inventories
A
- FIFO
- Weighted Average
3
Q
The goods first purchased are first sold and the goods remaining in the inventory at the end of the reporting period are most recently purchased or produced.
A
FIFO (First in first out)
4
Q
T/F
In FIFO, the inventory is this expressed in terms of recent or new prices while the cost of goods sold is earlier or old prices.
A
True
