144.How do the consistency principle and the full disclosure principle affect inventory valuation?

145.What is the effect of an error in the ending inventory balance on the income statement?

146.Explain how the inventory turnover ratio and the days' sales in inventory ratio are used to evaluate inventory management.

147.Identify and describe the four inventory valuation methods.

148.Explain why the lower of cost or market rule is used to value inventory.

Answer rating: 100% (QA)

The consistency principle states that a company should use the same accounting methods and principles from one period to another to ensure comparability of financial statements over time The full disc... View the full answer