inventory

Question 1

periodic inventory

Answer 1

physical count, usually done at year end

Question 2

perpetual

Answer 2

ongoing, real time

Question 3

ceiling-NRV

Answer 3

sale price-disposal cost

Question 4

floor

Answer 4

NRV- normal profit margin

Question 5

average inventory methods

Answer 5

• perpetual ,moving average- average after each purchase
• periodic ,weighted average-takes total costs of all inventory purchases and divides them by total number of unit available

Question 6

impairment of asset 2 step

Answer 6

• test for impairment if future cash flow greater than carry amount
• impairment loss is carry amount greater than fair value

Question 7

lack commercial substance -boot receive

Answer 7

less than 25%, recognize that %

-boot/ total receive = % time gain