F3 - Inventory (lifo/fifo)

Question 1

Under all LIFO methods in a period of rising prices

Answer 1

highest cost of goods sold and the lowest net income(less profit)

Question 2

Under FIFO in rising prices

Answer 2

lowest cost of goods sold and the highest net income(higher profit)

Question 3

Reporting COGS regarding “inventory consignment” we add / subtract the following

Answer 3

• BASE !!
  Beg Inv
  +Freight In
  +Purchase
  + Transport. consignees
  -COGS(squeeze)
  =end inventory (add both the consigner and consignee inventory)

Question 4

Permanent declines(decreases)(lower cost method) in inventory makr value should be reflected in ..

Answer 4

interim f/s in the period incurred(recognized)

Question 5

Under the lower of cost or net realizable value rule we only look for the comparison off?

Answer 5

Original cost and NRV(selling - disposal) of which is lower

Question 6

Under the lower cost or maket method we compare all of these and find the smallest of them all then compare to HC by?

Answer 6

HC (original)
Ceiling(NRV)
Replacement cost(mkt)
Floor(Normal profit margin= (nrv-np)

Question 7

Under moving avg method PERUPETUAL new weighted avg cost is computer after each purchase and issues(sold) are price at the latest weighted avg costr, but when new purchase appear use the one given it goes back to normal

Answer 7

1. Stop whenever there is a sale
2. you add beg units +purch units and COGAS (unit cost)
3. divide unit cost/ total units = new cost per unit
4. that is the number you will use for the sale (COGS )
5. then repeat the process if there is another one