How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Manal Elkhoshkhany Your Own Question

Manal Elkhoshkhany
Manal Elkhoshkhany, Tutor
Category: Homework
Satisfied Customers: 9512
Experience:  More than 5000 online tutoring sessions.
3708793
Type Your Homework Question Here...
Manal Elkhoshkhany is online now
A new question is answered every 9 seconds

21.Which of the following is true about lower-of-cost-or-market a.It

Resolved Question:

21.Which of the following is true about lower-of-cost-or-market?
a.It is inconsistent because losses are recognized but not gains.
b.It usually understates assets.
c.It can increase future income.
d.All of these.
22.The primary basis of accounting for inventories is cost. A departure from the cost basis of pricing the inventory is required where there is evidence that when the goods are sold in the ordinary course of business their
a.selling price will be less than their replacement cost.
b.replacement cost will be more than their net realizable value.
c.cost will be less than their replacement cost.
d.future utility will be less than their cost.
23.When valuing raw materials inventory at lower-of-cost-or-market, what is the meaning of the term "market"?
a.Net realizable value
b.Net realizable value less a normal profit margin
c.Current replacement cost
d.Discounted present value
24.In no case can "market" in the lower-of-cost-or-market rule be more than
a.estimated selling price in the ordinary course of business.
b.estimated selling price in the ordinary course of business less reasonably predictable costs of completion and disposal.
c.estimated selling price in the ordinary course of business less reasonably predictable costs of completion and disposal and an allowance for an approximately normal profit margin.
d.estimated selling price in the ordinary course of business less reasonably predictable costs of completion and disposal, an allowance for an approximately normal profit margin, and an adequate reserve for possible future losses.
25.Designated market value
a.is always the middle value of replacement cost, net realizable value, and net realizable value less a normal profit margin.
b.should always be equal to net realizable value.
c.may sometimes exceed net realizable value.
d.should always be equal to net realizable value less a normal profit margin.
26.Lower-of-cost-or-market
a.is most conservative if applied to the total inventory.
b.is most conservative if applied to major categories of inventory.
c.is most conservative if applied to individual items of inventory.
d.must be applied to major categories for taxes.
27.An item of inventory purchased this period for $15.00 has been incorrectly written down to its current replacement cost of $10.00. It sells during the following period for $30.00, its normal selling price, with disposal costs of $3.00 and normal profit of $12.00. Which of the following statements is not true?
a.The cost of sales of the following year will be understated.
b.The current year's income is understated.
c.The closing inventory of the current year is understated.
d.Income of the following year will be understated.
28.When the direct method is used to record inventory at market
a.there is a direct reduction in the selling price of the product that results in a loss being recorded on the income statement prior to the sale.
b.a loss is recorded directly in the inventory account by crediting inventory and debiting loss on inventory decline.
c.only the portion of the loss attributable to inventory sold during the period is recorded in the financial statements.
d.the market value figure for ending inventory is substituted for cost and the loss is buried in cost of goods sold.
29. Lower-of-cost-or-market as it applies to inventory is best described as the
a.drop of future utility below its original cost.
b.method of determining cost of goods sold.
c.assumption to determine inventory flow.
d.change in inventory value to market value.
30. The floor to be used in applying the lower-of-cost-or-market method to inventory is determined as the
a.net realizable value.
b.net realizable value less normal profit margin.
c.replacement cost.
d.selling price less costs of completion and disposal.
31. What is the rationale behind the ceiling when applying the lower-of-cost-or-market method to inventory?
a.Prevents understatement of the inventory value.
b.Allows for a normal profit to be earned.
c.Allows for items to be valued at replacement cost.
d.Prevents overstatement of the value of obsolete or damaged inventories.
32. Why are inventories stated at lower-of-cost-or-market?
a.To report a loss when there is a decrease in the future utility.
b.To be conservative.
c.To report a loss when there is a decrease in the future utility below the original cost.
d.To permit future profits to be recognized.
33. Which of the following is not an acceptable approach in applying the lower-of-cost-or-market method to inventory?
a.Inventory location.
b.Categories of inventory items.
c.Individual item.
d.Total of the inventory.
34. Which method(s) may be used to record a loss due to a price decline in the value of inventory?
a.Allowance method.
b.Sales method.
c.Direct method
d.Both a and c.
Submitted: 3 years ago.
Category: Homework
Expert:  Manal Elkhoshkhany replied 3 years ago.

Hello again

 

Please click here for the solutions

 

 

P.S. If you like my services, please feel free to direct your future posts to me specifically by typing "For BusinessTutor" at the beginning of your post. Should you choose to do this, please try to allow me 48 hours before the deadline. If you need to meet me online for a timed assignment, please advise me of the date and time (EST) you want me to meet you here and I will. Please make sure you take the length (and number) of the questions into consideration when making your offer to avoid delays in providing solutions.

 

Thank you

Expert:  Manal Elkhoshkhany replied 3 years ago.
THIS ANSWER IS LOCKED!
You can view this answer by clicking here to Register or Login and paying $3.
If you've already paid for this answer, simply Login.
Manal Elkhoshkhany, Tutor
Category: Homework
Satisfied Customers: 9512
Experience: More than 5000 online tutoring sessions.
Manal Elkhoshkhany and 3 other Homework Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
< Last | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin Kernersville, NC
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther Woodstock, NY
  • Thank you so much for taking your time and knowledge to support my concerns. Not only did you answer my questions, you even took it a step further with replying with more pertinent information I needed to know. Robin Elkton, Maryland
  • He answered my question promptly and gave me accurate, detailed information. If all of your experts are half as good, you have a great thing going here. Diane Dallas, TX
 
 
 

Meet The Experts:

 
 
 
  • Manal Elkhoshkhany

    Tutor

    Satisfied Customers:

    4522
    More than 5000 online tutoring sessions.
< Last | Next >
  • http://ww2.justanswer.com/uploads/BU/BusinessTutor/2012-2-2_115741_Kouki2.64x64.jpg Manal Elkhoshkhany's Avatar

    Manal Elkhoshkhany

    Tutor

    Satisfied Customers:

    4522
    More than 5000 online tutoring sessions.
  • http://ww2.justanswer.com/uploads/ComputersGuru/2010-02-13_051118_Photo41.JPG LogicPro's Avatar

    LogicPro

    Engineer

    Satisfied Customers:

    3458
    Expert in Java C++ C C# VB Javascript Design SQL HTML
  • http://ww2.justanswer.com/uploads/LI/lindaus/2012-6-10_04811_IMG20120609164157.64x64.jpg Linda_us's Avatar

    Linda_us

    Finance, Accounts & Homework Tutor

    Satisfied Customers:

    3124
    Post Graduate Diploma in Management (MBA)
  • http://ww2.justanswer.com/uploads/chooser77/2009-08-18_162025_Chris.jpg Chris M.'s Avatar

    Chris M.

    M.S.W. Social Work

    Satisfied Customers:

    2385
    Master's Degree, strong math and writing skills, experience in one-on-one tutoring (college English)
  • http://ww2.justanswer.com/uploads/JawaadAhmed/2009-6-27_12137_SIs_SHadi.jpg F. Naz's Avatar

    F. Naz

    Chartered Accountant

    Satisfied Customers:

    1988
    Experience with chartered accountancy
  • http://ww2.justanswer.com/uploads/JK/jkcpa/2011-1-16_182614_jkcpa.64x64.jpg Bizhelp's Avatar

    Bizhelp

    CPA

    Satisfied Customers:

    1876
    Bachelors Degree and CPA with Accounting work experience
  • http://ww2.justanswer.com/uploads/avremote/photoa.jpg Seanna's Avatar

    Seanna

    Tutor

    Satisfied Customers:

    1781
    3,000+ satisfied customers, all topics, A+ work
 
 
 
Chat Now With A Tutor
Manal Elkhoshkhany
Manal Elkhoshkhany
4524 Satisfied Customers
More than 5000 online tutoring sessions.