Inventory

Question 1

How to calculate COGS using LIFO:

Answer 1

Question 2

What is the difference between the perpetual and periodic inventory systems?

Answer 2

Question 3

What are the steps to apply the Lower of Cost or Market (LCM) rule under LIFO?

Answer 3

Question 4

How do you calculate inventory lost in a fire using the gross profit (margin) method?

Answer 4

Question 5

How do you calculate ending inventory using Dollar-Value LIFO?

Answer 5

Question 6

How are FOB shipping point and FOB destination items treated in inventory calculations?

Answer 6

Question 7

How are liabilities and inventory treated under FOB shipping point and FOB destination?

Answer 7

Question 8

How do you calculate ending inventory using the moving average method?

Answer 8

Question 9

What are the roles and characteristics of the consignor and consignee in a consignment arrangement?

Answer 9

Question 10

How do you apply the Lower of Cost or Net Realizable Value (LCNRV) method?

Answer 10

Question 11

Why are shipping and insurance included in COGS, while commission and advertising are not?

Answer 11

Question 12

How do you calculate COGS under the perpetual inventory system using the average pricing method?

Answer 12

Question 13

How do you calculate COGS under the periodic inventory system using the average pricing method?

Answer 13

Question 14

How do you calculate COGS and ending inventory under the weighted average method?

Answer 14

Question 15

What goes into cost of inventory

Answer 15

Question 16

How is inventory carried on the balance sheet under the gross and net methods when a discount period is missed?

Question 17

Steps to Solve Dollar-Value LIFO Problems:

Answer 17

Question 18

How do you allocate shipping costs to year-end inventory?

Answer 18

Question 19

During a period of inflation, how does LIFO affect ending inventory and income tax payable compared to FIFO?

Answer 19

Question 20

During periods of rising prices, which inventory method results in the same ending inventory in both perpetual and periodic inventory systems?

Answer 20

Question 21

What is a disadvantage of the periodic inventory system regarding inventory shortages?

Answer 21

In a periodic system, you only check and update inventory at the end of the period. If anything is lost or stolen during that time, it won’t be noticed until the end, and it gets counted as if it was sold. This makes it hard to tell how much was actually sold and how much was lost.

Question 22

Dollar-Value LIFO Calculation Steps

Answer 22

Question 23

If Ending inventory is Overstated what are the impacts.
If Ending inventory is Understated what are the impacts.

Answer 23

Question 24

What are the differences in LIFO Inventory Calculation for the Periodic vs. Perpetual methods

Answer 24

Question 25

BIG DVL NOTE

Answer 25

Question 26

BI and EI Relationships with COGS

Answer 26

Question 27

Markup on Cost to Cost-to-Sales Ratio

Answer 27

Question 28

Whats the Moving-Average Method for Unit Cost Calculation

Answer 28

Question 29

Inventoriable Costs - what is included and whats excluded?

Answer 29

Question 30

Steps to Calculate Payment with Multiple Trade Discounts, Early Payment Discount, and Additional Costs

Answer 30

Question 31

Net Method for Inventory Purchases with Cash Discounts

Answer 31

Question 32

FOB Shipping Point vs. FOB Destination – Inventory Cost Differences

Answer 32

Question 33

What’s Conventional Retail Inventory Method

Answer 33

Question 34

What’s the difference between Moving Average vs. Weighted Average Inventory Methods

Answer 34

Question 35

Weighted Average Inventory Cost Method

Answer 35

Question 36

Notes for calculating the initial cost of inventory

Answer 36

Question 37

During periods of rising prices, which inventory cost flow method results in the same dollar amount of ending inventory in both perpetual and periodic inventory systems?

Answer 37

Question 38

Another DVL note

Answer 38