Intermediate Accounting Ch. 9 15th Edition Exam with 100% Solved
3 views 0 purchase
Course
Intermediate Accounting
Institution
Intermediate Accounting
Intermediate Accounting Ch. 9 15th
Edition Exam with 100% Solved
The method of recording inventory at market that substitutes the market
value for cost and reports the loss as a part of cost of goods sold is the: -
allowance method.
The primary basis of accounting for inventories is cost. A d...
The method of recording inventory at market that substitutes the market
value for cost and reports the loss as a part of cost of goods sold is the: -
✔✔ allowance method.
The primary basis of accounting for inventories is cost. A departure from
the cost basis of pricing the inventory is required where there is evidence
that when the goods are sold in the ordinary course of business their -✔✔
future utility will be less than their cost.
In applying Lower-of-Cost-or-Market, the designated market value is -✔✔
the middle value of replacement cost, net realizable value and net
realizable value less a normal profit margin.
Net realizable value is defined as estimated selling price less purchase
price. -✔✔ False
The direct method of recording inventory at market under the lower of cost
or market rule establishes a separate contra asset account and a loss
account to record the write-off. -✔✔ False
, In applying the lower of cost or market rule, the floor is defined as: -✔✔ net
realizable value less a normal profit margin.
In the lower of cost or market rule, net realizable value is referred to as the:
-✔✔ ceiling
When the direct method is used adjust cost to "market", what account is
debited? -✔✔ Cost of Goods Sold.
Inventory may be recorded at net realizable value if -✔✔ there are no
significant costs of disposal, the inventory consists of precious metals or
agricultural products, and there is a controlled market with a quoted price.
The LIFO retail method assumes that markups and markdowns apply to
both beginning inventory and goods purchased during the period. -✔✔
False
The relative sales value method is used throughout the: -✔✔ petroleum
industry.
If a material amount of inventory has been ordered through a formal
purchase contract at the balance sheet date for future delivery at firm
prices, -✔✔ this fact must be disclosed.
The percentage markup on cost can be computed by dividing gross profit
by 100%: -✔✔ minus gross profit.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller JOSHCLAY. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $9.99. You're not tied to anything after your purchase.