What is meant by the assertion that an example of conservatism in accounting is recording inventory at

Question:

What is meant by the assertion that an example of conservatism in accounting is recording inventory at the lower of cost and net realizable value?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Financial Accounting

ISBN: 978-1259307959

4th edition

Authors: David Spiceland, Wayne Thomas, Don Herrmann

See More Books

Question Posted: Jul 22, 2016 10:06 AM

See More Questions

What is meant by the assertion that the Supreme Court is a countermajoritarian institution?
What is meant by the assertion that the lower-of-cost-or-market method is an example of conservatism in accounting?
MULTIPLE-CHOICE QUESTIONS 1. Which of the following statements best describes what is meant by the term appropriateness of audit evidence? a. Appropriateness is a measure of the quality of audit...
Write a program that reads in the x - and y - coordinates in Cartesian space for the endpoints of a line segment and then determines if the line segment is parallel to the y - axis. Hint: a line is...
Timo Companys standard materials cost per unit of output is $10 (2 pounds $5). During July, the company purchases and uses 3,200 pounds of materials costing $16,160 in making 1,500 units of finished...
How to calculate the price of a bond between interest payment dates (using either the TVM variables or the BOND worksheet)
1. Think of one or two organizations that interest you and look up their histories on the internet.
Encounter Sporting Goods Company has two divisions, Wholesale and Retail, and two corporate service departments, Tech Support and Accounts Payable. The corporate expenses for the year ended December...
a government with a statutory balanced budget requirement wilk always have a struturally balanced budget. True or False?
Parker, Inc., acquires 70 percent of Sawyer Company for $420,000. The remaining 30 percent of Sawyer's outstanding shares continue to trade at a collective value of $174,000. On the acquisition date,...
Explain the method of reporting inventory at lower of cost and net realizable value.
For a company like Best Buy, what does the balance of Cost of Goods Sold in the income statement represent? What does the balance of Inventory in the balance sheet represent?
What types of firms are most likely to benefit from a formal planning process? What types are most likely to face the planning misfires discussed in this chapter?
Consider a two-period model in which an individual needs to decide how much to consume in the present, c, and how much to consume in the future, c. The individual receives income, y, in the present,...
Koopman Company began operations on January 1, 2015, and uses the FIFO inventory method for financial reporting and the average cost inventory method for income taxes. At the beginning of 2017,...
Assume you have been given $400,000 CAD with access to all listed stocks, bonds, futures, and options worldwide. You can trade in options and futures, in combination with the underlying asset....
1.Basis of Islamic Accounting Theory The history of the birth of Islamic accounting is inseparable from the development of Islam, the obligation to record non-cash transactions (see QS. Al-Baqarah:...
What kind of information can you provide from the label on the door frame of a car? A scene of a car from drivers side a. factory recommended mileage a year b. factory recommended tire pressure c....
What is the largest recession of the twentieth century? What were some of its most significant effects? How did this recession differ from other recessions that followed?
Describe the Operations (+,,*,/) that can cause negligible addition (NA), error magnification (EM), or subtractive cancellation (SC) in calculating ?((x^2)+1) - x . Give the range of where they might...
When perpetual inventory records are kept, the results under the FIFO and LIFO methods are the same as they would be in a periodic inventory system. Do you agree? Explain.
Nicholas Company discovers in 2012 that its ending inventory at December 31, 2011, was $5,000 understated. What effect will this error have on (a) 2011 net income, (b) 2012 net income, and (c) The...
Susan Cashin Company identifies the following items for possible inclusion in the physical inventory. Indicate whether each item should be included or excluded from the inventory taking. (a) 900...
If Total Assets are $2,100 and Total Equity is $1,600 then what is the value of Total Liabilities?
Date Account and Explanation Debit Credit Jun 1 Cash 105,000 Jun 1 Capital 105,000 (capital contribution) Jun 1 Computer Equipment 56,000 Jun 1 Cash 56,000 Jun 1 Cash 198,000 Jun 1 Bank Loan Payable...
.Is bankruptcy on the part of the borrower a common risk that frequently interferes with a lenders efforts to work out a defaulted loan through either nonforeclosure means or foreclosure? Discuss.

What is meant by the assertion that an example of conservatism in accounting is recording inventory at

Question:

Step by Step Answer:

Firms are required to report the falling value of inventory but not allo...View the full answer

Financial Accounting

Students also viewed these Cost Accounting questions