Accounting for Inventories - of Market value = Net...

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Accounting for Inventories   Financial Statements Overview Accounting for Inventories   GAAP       Accounting Research Bulletin (ARB) No. 43, Chapter 4 , June 1953      Inventory Recording System        Perpetual Inventory System          Periodic Inventory System   Inventory Valuation Methods       First-in First-out (FIFO)       Last-in First-out (LIFO)       Moving Average Method       Weighted Average Method        Dollar Value LIFO   Lower of Cost or Market (LCM)        Inventories are valued at  cost or market, whichever is lower       [ ARB No. 43, Chapter 4, Para. 8   Market Value of Inventories  [ ARB No. 43, Chapter 4, Para. 9 ]        Market value = Current replacement cost        Upper limit (Ceiling)
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Unformatted text preview: of Market value = Net Realizable Value (NRV) Lower limit (Floor) of Market value = Net Realizable Value (NRV) - Normal Profit Margin Net Realizable Value (NRV) = Estimated Selling Price - Cost of Completion and Disposal Items to be included in inventories Goods in transit FOB destination --> Seller's Inventory FOB shipping point --> Buyer's Inventory Consigned goods are consignor's inventory Goods sold by installment sales are not included in seller's inventory. Profit on installment sales is recognized in proportion to cash collected....
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