Chapter 11 - inventory Cost Flow Techniques

Question 1

The cost of inventories shall be determined by using either

Answer 1

a. First in, First out (par 25)
b. Weighted average - periodic (par 25)
c. Specific Identification (par 23)
d. Moving average - perpetual (par 27)

Question 2

It is a method that assumes that the goods first purchased are first sold and consequently, the goods remaining in the inventory at the end of the period are those most recently purchased or produced.

Answer 2

FIFO

Question 3

the inventory is thus expressed in terms of recent or new prices while the cost of goods sold is representative of old prices

Answer 3

FIFO

Question 4

This method favors the statement of financial position in that the inventory stated at the current replacement cost

Answer 4

FIFO

Question 5

It means that specific costs are attributed to identified items of inventory.

Answer 5

specific identification method

Question 6

The cost of inventories of items that are not ordinarily interchangeable and goods or services produced and segregated for specific projects shall be assigned by using specific identification of their individual costs

Answer 6

specific identification method