Accounting 313 Exam 3 (ch 8,9,10)

Net- p.MsoNormal, li.MsoNormal, div.MsoNormal { margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: "Times New Roman"; }div.Section1 { page: Section1; } By the net method purchase discounts not taken are considered interest expense, because they are viewed as compensation to the seller for providing financing to the buyer.
gross- p.MsoNormal, li.MsoNormal, div.MsoNormal { margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: "Times New Roman"; }div.Section1 { page: Section1; } By the gross method purchase discounts not taken are viewed as part of inventory cost.

P.MsoNormal, li.MsoNormal, div.MsoNormal { margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: "Times New Roman"; }div.Section1 { page: Section1; } (1) specific identification, (2) first-in, first-out (FIFO), (3) last-in, first-out (LIFO), and (4) average cost

P.MsoNormal, li.MsoNormal, div.MsoNormal { margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: "Times New Roman"; }div.Section1 { page: Section1; } requires each unit sold during the period or each unit on hand at the end of the period to be traced through the system and matched with its actual cost

P.MsoNormal, li.MsoNormal, div.MsoNormal { margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: "Times New Roman"; }div.Section1 { page: Section1; } First-in, first-out (FIFO) assumes that units sold are the first units acquired.

P.MsoNormal, li.MsoNormal, div.MsoNormal { margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: "Times New Roman"; }div.Section1 { page: Section1; } assumes that the units sold are the most recent units purchased

P.MsoNormal, li.MsoNormal, div.MsoNormal { margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: "Times New Roman"; }div.Section1 { page: Section1; } assumes that cost of goods sold and ending inventory consist of a mixture of all the goods available for sale.

P.MsoNormal, li.MsoNormal, div.MsoNormal { margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: "Times New Roman"; }div.Section1 { page: Section1; } dividing gross profit (net sales minus cost of goods sold) by net sales

P.MsoNormal, li.MsoNormal, div.MsoNormal { margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: "Times New Roman"; }div.Section1 { page: Section1; } dividing cost of goods sold by average inventory

P.MsoNormal, li.MsoNormal, div.MsoNormal { margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: "Times New Roman"; }div.Section1 { page: Section1; } dividing the number of days in the period by the inventory turnover ratio

P.MsoNormal, li.MsoNormal, div.MsoNormal { margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: "Times New Roman"; }p.Questions, li.Questions, div.Questions { margin: 0in 0in 0.0001pt; text-align: justify; text-indent: 27pt; font-size: 12pt; font-family: "Times New Roman"; }div.Section1 { page: Section1; } The primary difference between U.S. GAAP and IFRS in the methods allowed to value inventory is that IFRS does not allow the use of the LIFO method.

Total cost of goods available for sale/units available for sale

Use purchase and purchase return accounts, no COGS

Cogas

@font-face { font-family: "Cambria"; }@font-face { font-family: "Bookman Old Style"; }p.MsoNormal, li.MsoNormal, div.MsoNormal { margin: 0in 0in 0.0001pt; font-size: 12pt; font-family: "Times New Roman"; }div.Section1 { page: Section1; } disposal price minus direct disposal costs.

Include beginning inventory to calculate cost-to-retail

exclude markdowns until after calculating cost-to-retail