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Q. In between FIFO and lifo which one is the correct method?
The differences for the four methods take place because the company paid different prices for goods purchased. No differences would take place if purchase prices were constant. Ever since a company's purchase prices are seldom constant inventory costing method affects cost of goods sold or inventory cost or gross margin and net income. Thus companies must disclose on their financial statements which inventory costing methods were used. Which one is the correct method? All four methods of inventory costing are satisfactory no single method is the merely correct method. Different methods are good under different conditions. If a company needs to match sales revenue with current cost of goods sold it would use LIFO. If a company look for to reduce its income taxes in a period of rising prices it would also use LIFO. On the other hand LIFO frequently charges against revenues the cost of goods not actually sold. As well LIFO may permit the company to manipulate net income by changing the timing of additional purchases.
The FIFO as well as specific identification methods results in a more precise matching of historical cost with revenue. Though, FIFO is able to give rise to paper profits while specific identification can give rise to income manipulation. The weighted-average method as well allows manipulation of income. Merely under FIFO is the manipulation of net income not possible.
What do you recognize by Open Item Managed Account? Ans) Open item management make sures that all items that have not yet been cleared are available in the system. Only after ea
Benefits of Purchases Discounts Purchases Discounts account is used to record discounts given for prompt payment. To prove ACCOUNTS PAYABLE LEDGER , you will look at bala
format of the account
Stewart Company sold 180 units @ $320 each on October 31, 2012. Cash selling and administrative expenses were $15,000. The following information is also available: The
Paid salaries to sales clerks
Q. Valuation of ending inventory? First a merchandising company should be sure that it has properly valued its ending inventory. If the resulting in an ending inventory is over
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Assume we are a trading company giving devices and sometimes after sales service. when any fault came we just replace the hardware from another defective device and getting the pay
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Q. Explain about lower-of-cost-or-market method? The lower-of-cost-or-market (LCM) method is the inventory costing method that values inventory at the lower of its historical c
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