Intacc q5 - Lecture notes 5 PDF

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Which the inventory cost flow assumption would consistently result in the highest income in a period of sustained inflation? Answer: FIFO LCNRV of inventory; Answer: Is always either the net realizable value or cost Which inventory cost flow assumption provides the best measure of earnings, where “b...

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1. Which the inventory cost flow assumption would consistently result in the highest income in a period of sustained inflation? Answer: FIFO

2. LCNRV of inventory; Answer: Is always either the net realizable value or cost

3. Which inventory cost flow assumption provides the best measure of earnings, where “best” means most appropriate for predicting future earnings, when prices have been declining? Answer: LIFO

4. Which instance will not require inventory estimation? Answer: Year-end reporting for inventory shown on the face of the statement of financial position

5. Under the gross profit method, if the gross profit rate is based on cost, the cost of sales is computed as; Answer: Net sales divided by sales ratio...