=+a. Unrealized profit should not be credited to income account of the corpora- tion either directly or
Question:
=+a. Unrealized profit should not be credited to income account of the corpora-
tion either directly or indirectly, through the medium of charging against such unrealized profits amounts which would ordinarily fail to be charged against income account. Profit is deemed to be realized when a sale in the ordinary course of business is effected, unless the circumstances are such that the collection of the sale price is not reasonably assured. An exception to the general rule may be made in respect of inventories in industries
(such as the packing-house industry) in which owing to the impossibility of determining costs it is a trade custom to take inventories at net selling prices, which may exceed cost.
Step by Step Answer:
Accounting Theory Conceptual Issues In A Political And Economic Environment
ISBN: 9780324186239
6th Edition
Authors: Harry I. Wolk, James Dodd, Michael G. Tearney