Ch 091

Ch 091 - 10/26/2009 Kieso, Weygandt, Warfield: Intermediate...

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94% (15 out of 16 correct) Responses to questions are indicated by the symbol. 1. The term market in the phrase "lower of cost or market" generally means the: A. ceiling. B. floor. C. net realizable value. D. replacement cost. The term market generally means the cost to replace the inventory item. 2. The lower limit (floor) for inventory valuation is defined as the selling price less: A. a normal profit margin. B. estimated costs of completion and disposal. C. estimated costs of completion and disposal and a normal profit margin. D. the net realizable value. The floor for inventory valuation is the selling price less estimated costs of completion and disposal and a normal profit margin. 3. If the replacement cost of an inventory item is less than the floor value but higher than its cost, the inventory item would be valued at: A. the ceiling value. B. cost. C. the floor value. D. replacement cost. An inventory item would be valued at cost when its replacement cost is less than the floor value but higher than its cost. 10/26/2009 Kieso, Weygandt, Warfield: Intermediate… http://bcs.wiley.com/he-bcs/Books?acti… 1/5
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4. The most common method of applying the lower of cost or market rule is by: A. an item-by-item basis.
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This note was uploaded on 02/22/2010 for the course ACG 6200 taught by Professor Lorenzo during the Spring '10 term at FIU.

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Ch 091 - 10/26/2009 Kieso, Weygandt, Warfield: Intermediate...

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