Analysis of Inventories

Which of the following costs should be capitalized as part of inventory?

Under IFRS, inventory is measured at the lower of cost or:

Which inventory valuation method results in the same Cost of Goods Sold (COGS) under both periodic and perpetual inventory systems?

In a period of rising prices and stable inventory quantities, which valuation method results in the highest Net Income?

A company reports an inventory write-down of $5 million. Which of the following ratios will most likely increase immediately following this adjustment?

Which of the following is permitted under US GAAP but not under IFRS?

A manufacturing firm reports the following: Raw Materials Inventory is decreasing, while Work-in-Process (WIP) is decreasing. What does this most likely indicate?

Company A uses LIFO. Its reported LIFO Inventory is $100 million, and its LIFO Reserve is $20 million. What would be the estimated inventory value if the company used FIFO?

LIFO liquidation occurs when a firm:

In a deflationary environment (falling prices), which inventory method results in higher Cost of Goods Sold (COGS)?

A company has a LIFO reserve of $300 at the start of the year and $900 at the end of the year. If LIFO COGS is $1,500, what is the FIFO COGS?

Under US GAAP, the 'market' value for inventory valuation is primarily defined as:

If a company using LIFO liquidates older inventory layers, the immediate effect on the financial statements is:

A firm has an Inventory Turnover Ratio of 4.0. What is the approximate Days of Inventory on Hand (DOH)?

Which of the following best describes the 'ceiling' for market value under US GAAP inventory measurement?

Assuming an inflationary environment, which method results in the highest Operating Cash Flow?

When analyzing a company that uses LIFO, an analyst adjusts the Balance Sheet Inventory to FIFO. To balance the accounting equation, the analyst should also:

If a company's Finished Goods inventory is increasing while its Sales are flat, this most likely signals:

Under IFRS, if the net realizable value (NRV) of previously written-down inventory increases, the company must:

Purchases: Jan (10 @ $10), Feb (10 @ $20). Sales: 10 units in March. What is the COGS using the Perpetual LIFO method?

Which industry type would most likely use the 'Specific Identification' method for inventory valuation?

Under US GAAP, the reversal of a previous inventory write-down is:

Which ratio serves as an indicator of a firm's liquidity by excluding inventory?

For a company with a 'manageably small number of products,' which revenue modeling approach provides the most granular level of detail?

In a periodic inventory system, Cost of Goods Sold (COGS) is determined by:

An extremely high Inventory Turnover Ratio relative to industry peers might indicate:

Cost: $100. Selling Price: $90. Selling Costs: $10. Replacement Cost: $95. Normal Profit: $20. Under IFRS, what is the reported value of the inventory?

Using the same data (Cost $100, NRV $80, Replacement Cost $95, Normal Profit $20), what is the reported value under US GAAP?

Which costing method generally reflects the physical flow of goods for a supermarket selling perishable food?

Which of the following is treated as an expense in the period incurred rather than an inventory cost?

The inventory turnover ratio is calculated as:

Which of the following scenarios allows inventory to be reported above historical cost?

If a company changes from LIFO to FIFO, this change generally requires:

In a period of rising prices, the LIFO reserve generally:

The 'retail method' of inventory valuation involves:

Which accounting standard allows for the reversal of inventory write-downs?

Compared to FIFO, a firm using LIFO in an inflationary environment will report:

A LIFO liquidation results in sustainable higher profits for the company.

Which inventory system requires a physical count to calculate Cost of Goods Sold?

If a company has a LIFO Reserve of $50,000 and a tax rate of 30%, what is the cumulative tax saving realized by using LIFO instead of FIFO?

During deflation, using LIFO rather than FIFO will result in:

When comparing two firms, one using LIFO and one using FIFO, the analyst should generally:

Standard costing involves:

Which component is NOT included in the calculation of Net Realizable Value (NRV)?

Purchases: Jan (10 units), Feb (10 units). Sales: 10 units in March. Under the Weighted Average Cost method, the cost per unit is determined by:

An analyst observes that a company’s LIFO reserve has decreased significantly from the prior year. This could indicate:

Inventory disclosures in the financial statement footnotes typically include:

Under the US GAAP 'Lower of Cost or Market' rule, if Replacement Cost is $50, NRV is $70, and NRV minus Profit Margin is $55, what is the 'Market' value?

Which of the following creates a 'permanent difference' between tax and accounting books related to inventory?

If a firm uses LIFO and prices are stable (no inflation or deflation), LIFO COGS will be: