Advantages and disadvantages of fifo, Accounting Basics

Assignment Help:

Q. Advantages and Disadvantages of FIFO?

FIFO: Advantages (a) FIFO is easy to apply (b) the assumed flow of costs habitually corresponds with the normal physical flow of goods (c) no manipulation of income is possible and (d) the balance sheet amount for inventory is likely to approximate the current market value.

Disadvantages (a) Recognizes paper profits and (b) tax burden is heavier if used for tax purposes when prices are rising.

Related Discussions:- Advantages and disadvantages of fifo

A wholesaler lists a refrigerator model at a price of $850, A wholesaler li...

A wholesaler lists a refrigerator model at a price of $850 and offers a chain discount of 20% and 10%. What is the net price? A. $476 B. $595 C. $612 D. $644

What do you mean by depreciable asset, Q. What do you mean by depreciable a...

Q. What do you mean by depreciable asset? A depreciable asset is a manufactured asset such like a building, vehicle, machine or piece of equipment that provides service to a bu

Example of retail inventory method, Q. Example of retail inventory method? ...

Q. Example of retail inventory method? In Exhibit we display the retail inventory method. In the exhibit the costs (USD 22000) as well as retail (USD 40000) amounts for beginni

Specific identification method of inventory, Q. Specific identification met...

Q. Specific identification method of inventory? Specific identification- The specific identification method of inventory costing put together the actual cost to an identifiable

Income and expenditure accounts, format of the account

format of the account

Accounting Systems, The transactions for February need to be processed on M...

The transactions for February need to be processed on MYOB with the Username:n10026509 and no password and make sure the audit trail is on. Then Part B is a performance report. The

Prepare the account for allowance for bad debts, The 31st December 2009 tri...

The 31st December 2009 trial balance of Anika Co. reported the following information. Dr. Cr. Allowance for Bad Debts........................... $2,300 During the year 2010 t

Adjustments for financial reporting, Adjustments for financial reporting ...

Adjustments for financial reporting - Explain the basic characteristics of the cash basis and the accrual basis of accounting. - Recognize the reasons why adjusting entries

Cycle inventory is required , One or more phases in the operation cannot su...

One or more phases in the operation cannot supply all the items it makes concurrently.

The long distance company that you use charges $5.00, the long distance com...

the long distance company that you use charges $5.00 per month and $0.10 per minute per call. If your current bill is $25.00, how many minutes did you use?

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages