| Chapter 6: Inventories
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Chapter 6: Inventories

Learning Objectives

  1. Explain the management decisions related to inventory accounting, evaluation of inventory level, and the effects of inventory misstatements on income measurement.
  2. Define inventory cost, contrast goods flow and cost flow, and explain the lower-of-cost-or-market (LCM) rule.
  3. Calculate inventory cost under the periodic inventory system using various costing methods.
  4. Explain the effects of inventory costing methods on income determination and income taxes.
    5. Supplemental Objectives
  5. Calculate inventory cost under the perpetual inventory system using various costing methods.
  6. Use the retail method and gross profit method to estimate the cost of ending inventory.
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