level: Inventory
Questions and Answers List
level questions: Inventory
| Question | Answer |
|---|---|
| Freight-In vs Freight Out | Freight-In: INcluded in INventory Freight Out: Selling Expense |
| FOB Destination | Transfers to BUYER @ DESTINATION |
| FOB Shipping Point | Transfers to BUYER @ SHIPPING POINT |
| Equation for Periodic Inventory Cost | BI + Purchases = COGA - EI = COGS |
| Inventory Valuation: US GAAP | Lower of Cost or Market |
| Inventory Valuation: IFRS | Lower of Cost or NRV |
| Equation for Net Realizable Value (NRV) | NRV = Selling Price - Costs to Sell |
| Market Value Calculation | Middle of: - Replacement Cost - NRV (SP - Cost to Sell) - NRV - Profit |
| Which type of inventory costing has the same values for EI and COGS regardless if Perpetual or Periodic? | FIFO |
| Which type of inventory costing gives you a tax advantage? | LIFO |
| Inventory Costing: Periodic Weighted Average Formula | (COGA/# of units) = Cost/unit |
| Inventory Costing: Perpetual Moving Average Formula | (COGA/# of units) = Cost/Unit Changes after every purchase |
| Inventory Costing: Dollar Value LIFO | Price Index = EI Current/EI Base Price Index * Layer Base Increase |
| Conventional Retail Formula: | Markups NOT included in COGA for Cost AFS (Retail AFS - Sales - Markdowns) * (Cost AFS/Retail AFS) = EI @ LCM |
| If prices are UP, does LIFO or FIFO have a LOWER EI and NI? | LIFO |