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Q. Advantages and disadvantages inventory procedure?
Advantages as well as disadvantages of specific identification Companies that utilize the specific identification method of inventory costing state their cost of goods sold and ending inventory at the actual cost of specific units sold and on hand. Some accountants disagree that this method provides the most precise matching of costs and revenues and is thus the most theoretically sound method. This statement is factual for some one-of-a-kind items such like autos or real estate. For these items utilize of any other method would seem illogical.
One disadvantage of the specific identification method is that it allows the manipulation of income. For instance assume that a company bought three identical units of a given product at different prices. One unit cost USD 2000 and the second cost USD 2100 and the third cost USD 2200. The company trade one unit for USD 2800. The units are similar so the customer doesn't care which of the identical units the company ships. But the gross margin on the sale could be either USD 800 USD 700 or USD 600 depending on which unit the company ships.
Q. Change in accounting method for inventory? Occasionally companies vary inventory methods in spite of the principle of consistency. Improved financial reporting is the merely
Q. Explain about Merchandise inventory? Merchandise inventory is the quantity of goods assumed by a merchandising company for resale to customers. Merchandising companies verif
Graham maintains that formulation and implementation are phases in the strategic management process. Yolanda maintains that evaluation and estimation are also part of this proc
Q. Illustrate Periodic inventory procedure? Companies by means of periodic inventory procedure make no entries to the Merchandise Inventory account nor do they maintain unit re
1. Shaving 5% of the estimated direct labor hours in the predetermined overhead rate will result a high overhead rate, which would likely result a high credit balance of overapplie
Q. Balance of the Merchandise Inventory account? The balance of the Merchandise Inventory account is a cost of the inventory that should be on hand. This fact is a major reason
Q. Learning objectives of Accounting theory? - Discuss and Identify the underlying assumptions or else concepts of accounting. - Discuss and Identify the main principles of
Advantages of setting Accounting Standards: 1. Setting of Accounting Standards will decrease the variations in the preparation of financial statements significantly. 2. Sett
Q. Departures from cost basis of inventory measurement? In general companies must use historical cost to value inventories and cost of goods sold. But some circumstances justif
The Company changed its process of accounting for pre-opening costs. These changes had no cash impact and the pro forma amounts accessible in the consolidated statement of income r
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