Exam 8: Valuation of Inventories: a Cost-Basis Approach

A trade discount that is granted as an incentive for a first-time customer or as a reward for large order should be accounted for by the purchaser as revenue.

Where should goods in transit that were recently purchased F.o.b. destination be included on the statement of financial position?

Tang, Inc. sells collectible jewelry on consignment from various manufacturers and should include this consigned inventory on its statement of financial position.

The use of a Discounts Lost account implies that the recorded cost of a purchased inventory item is its

Oats Company offers a trade discount to its customers as a reward for large orders. According to the International Accounting Standards Board (IASB) how should the customers of Oats Company account for these trade discounts?

The use of a Purchase Discounts account implies that the recorded cost of a purchased inventory item is its

Which of the following is a characteristic of a perpetual inventory system?

Tanner Corporation's inventory cost on its statement of financial position was lower using first-in, first-out than it would have been using average cost. Assuming no beginning inventory, in what direction did the cost of purchases move during the period?

Freight charges on goods purchased are considered a period cost and therefore are not part of the cost of the inventory.

Homes 4 You builds single-family homes throughout the United States and Europe. The International Accounting Standards Board (IASB) Requires Homes 4 You to use which of the following cost flow assumptions for its inventory?

An inventory pricing procedure in which the oldest costs incurred rarely have an effect on the ending inventory valuation is

How is a significant amount of consignment inventory reported in the statement of financial position?

The LIFO perpetual method results in the same ending inventory and cost of goods sold amounts as under the LIFO periodic method.

Which method may be used to record cash discounts a company receives for paying suppliers promptly?

Which of the following inventories carried by a manufacturer is similar to the merchandise inventory of a retailer?

If both purchases and ending inventory are overstated by the same amount, net income is not affected.

Abnormal freight costs are not included on the statement of financial position as part of the cost of inventory.

IFRS requires manufacturers to disclose their inventory components on the statement of financial position or in related notes.

Computers For You is a retailer specializing in selling computers and related equipment. Which of the following would not be reported in the merchandise inventory account reported on the statement of financial position for Computers For You at December 31, 2019?

Which of the following is a product cost as it relates to inventory?