1. Which is more important from the standpoint of inventory costing: accrual accounting or valuation?
2. Which of the following methods do not require a physical inventory: periodic inventory system, perpetual inventory method, retail method, or gross profit method?
3. Given that the LCM rule is an application of the conservatism convention in the current accounting period, is the effect of this application also conservative in the next period?
4. Under what condition would all four methods of inventory pricing produce exactly the same results?
5. Under the perpetual inventory system, why is the cost of goods sold not determined by deducting the ending inventory from goods available for sale, as it is under the periodic method?
6. Is it good or bad for a retail store to have a large inventory?
7. Why is misstatement of inventory one of the most common means of financial statement fraud?