Quiz 9.17 – T/F Normal Shortages
Intermediate Accounting
Spiceland, Nelson, and Thomas
10th Edition
The retail amount used to calculate the cost-to-retail percentage is reduced by normal shortages. True or false?
The retail amount used to calculate the cost-to-retail percentage is reduced by normal shortages. True or false?
The cost and retail amounts that calculate the cost-to-retail percentage are reduced by abnormal shortages. True or false?
What are the differences of U.S. GAAP and IFRS in the application of the lower of cost or net realizable value rule for valuing inventory?
How do material adjustments to inventory due to the application of the lower of cost or market (LCM) rule be reported in the financial statements?
Outline the steps in the gross profit method of estimating ending inventory and indicate when it is used.
Differentiate the gross profit method and retail method in estimating ending inventory.
Explain the financial reporting needed if a company changes to or from the LIFO inventory method.
Explain the financial reporting needed if material misstatements are in previous financial statements included for comparative purposes in the current year’s financial statements.
The cost-to-retail percentage in the average cost retail method will be lower as to the percentage in the conventional retail method if there’s a net markdown. True or false?
The current year’s income includes the cumulative after-tax difference if FIFO is used instead of the average cost method. True or false?