Reference no: EM133021647

Question - The implication of the consistency principle is that accounting rules are not necessarily identical for every company. Some rules allow companies to choose which rule will apply to them, such as inventory valuation. What is most important is that companies consistently apply the rules they have chosen. The implication of the disclosure principle is that the body of the financial statements tells only part of the story; the footnotes are an integral part of the financial statements. The materiality principle implies that the financial statements may not include every single detail about companies' transactions, just the important (materially significant) details. Conservatism also implies judgment is involved in deciding what represents the "truth" contained within the financial statement. Discuss good measures for maintaining control over merchandise inventory.