F4 Notecards- Deck #2

Question 1

Periodic versus Perpetual inventory methods:

Answer 1

• FIFO = same, so use periodic on exam

- LIFO = different, so have to calculate both

Question 2

LIFO periodic method calculation

Answer 2

Take ending inventory in units and multiply by oldest cost available

Question 3

COGS calculation:

Answer 3

Beginning inventory
\+Purchases
-Less: Discounts
\+Freight IN
-Less: Ending inventory

Question 4

Net realizable value AKA

Answer 4

Price ceiling, AKA costs of completion

Question 5

Net realizable value less normal profit margin AKA

Answer 5

Price floor

Question 6

Lower of cost or market AKA

Answer 6

Lower of cost or middle of the three (ceiling, floor, replacement cost)