BUISENESS MANAGEMENT
INVENTORY CONTROL
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Last In, First Out
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First In, First Out
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Weighted Average
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Lower of Cost of Market
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Detailed explanation-1: -Answer and Explanation: The inventory method that results in a cost of ending inventory that is close to the current cost of replacing the inventory is the FIFO method.
Detailed explanation-2: -The First-in, First-out (FIFO) inventory method results in Cost of goods sold valued at the most recent cost. 9. The matching principle requires that the cost of goods sold be matched against the ending merchandise inventory in order to determine income.
Detailed explanation-3: -The gross profit method of estimating ending inventory is not acceptable for: Annual financial statements. A decrease in the original sales price of an item is called a: markdown.
Detailed explanation-4: -Which of the following must be considered when applying the gross profit method? The inventory cost flow assumption used by the company. Conditions that may have changed the current year gross profit margin.