9. An inventory error that causes an understatement (or overstatement) for net income
in one accounting period, if not corrected, will cause an overstatement (or
10. Market usually means replacement cost of inventory when applied in the LCM.
11. The accounting constraint of conservatism guides preparers of accounting reports
12. Factors that contribute to inventory shrinkage are breakage, loss, deterioration,
decay, and theft.
13.B For interim reporting, companies can estimate costs of goods sold and ending
inventory by either the retail inventory method or the gross profit method.
14. On December 31, 2013, inventory as a percent of current assets is ($ millions):
$426 / $72,886 = 0.6%.
15. Cost of goods available for sale equals ending inventory plus cost of sales. As of
16. Cost of goods available for sale equals ending inventory plus cost of sales. As of
17. Merchandise inventory (in KRW millions) comprises 17.3% (computed as