PM Page 335 Issue 3: Cost Flow Assumptions 335 EXHIBIT 7.3 Comparison of Cost Flow Assumptions, Historical Cost Basis Assumed Data Beginning Inventory: TV Set 1 Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Purchases: TV Set 2 Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TV Set 3 Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cost of Goods Available for Sale . . .
Words: 3314 - Pages: 14
bought are the first ones to be sold, and the stock bought later are sold out later. Recently-placed goods that are unsold remain in the inventory at the end of the year. With this inventory valuation approach, the company accounts for the value of inventory received first when sales are made. One of the more common reasons a company chooses FIFO is because it is a more natural straight-line approach since account for the first inventory in as the first items sold. This makes it especially useful
Words: 290 - Pages: 2
XACC/290 Version 1 Principles of Accounting I Copyright © 2013 by University of Phoenix. All rights reserved. Course Description This course covers the fundamentals of financial accounting as well as the identification, measurement, and reporting of the financial effects of economic events on an enterprise. Students will learn to examine financial information from the perspective of management. Other topics include decision-making, planning, and controlling from the perspective of a practicing
Words: 2112 - Pages: 9
Accounting FOR DUMmIES 4TH ‰ EDITION By John A. Tracy, CPA Accounting For Dummies®, 4th Edition Published by Wiley Publishing, Inc. 111 River St. Hoboken, NJ 07030-5774 www.wiley.com Copyright © 2008 by Wiley Publishing, Inc., Indianapolis, Indiana Published by Wiley Publishing, Inc., Indianapolis, Indiana Published simultaneously in Canada No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical
Words: 151136 - Pages: 605
Solutions for the Biltrite Bicycles Inc. Case Module I - Assessment of Inherent Risk..............................................................3 Module II – PRELIMINARY ASSESSMENT OF CONTROL RISK BASED ON AN UNDERSTANDING OF THE DESIGN OF CONTROLS ................17 Module III - Control Testing: Sales Processing................................................29 Module IV - PPS Sampling: Factory Equipment Additions............................31 Module V - Accounts Receivable Aging Analysis.
Words: 23506 - Pages: 95
inventory accounts: raw materials, work in process, and finished goods. (Goosen, pp. 31-46) Because the cost of goods manufactured is critical, a manufacturing company typically has a statement called cost of goods manufactured. The accounting for overhead in a manufacturing firm involves many complexities as does measuring and assigning values to the various components. In addition, a global manufacturer needs to adhere to the local reporting rules and regulations. Maintaining consistency across all
Words: 1892 - Pages: 8
characteristics is consistent with a commercial bank? Which of the following assets appears on the balance sheet at fair value? The use of acquisition cost as a valuation method is justified on the basis that acquisition cost is: U.S. GAAP, IFRS, and other major accounting standards are best characterized as Toro Company recognized $655,000 of cost of goods sold in 2010, in addition its implementation of a just-in-time inventory system allowed it to reduce its inventory from $325,000 at the beginning of
Words: 921 - Pages: 4
C H A P T E R 8 VALUATION OF I NVE NTOR I E S : A COST-BASIS APPROAC H LEARNING OBJECTIVES After studying this chapter, you should be able to: •1 •2 •3 •4 •5 •6 •7 •8 •9 •10 Identify major classifications of inventory. Distinguish between perpetual and periodic inventory systems. Identify the effects of inventory errors on the financial statements. Understand the items to include as inventory cost. Describe and compare the cost flow assumptions used to account for inventories. Explain
Words: 30350 - Pages: 122
Chapter 5 REVENUE AND MONETARY ASSETS Changes from Tenth Edition The chapter has been updated. The SEC’s SAB101 Revenue Recognition tests have been added. Approach The sequence of transactions for accounts receivable and bad debts often causes difficulty; indeed, the time that one is sometimes forced to spend on this topic is all out of proportion to its importance. Students often do not understand why an Allowance for Bad Debts account is necessary at all; they do not grasp the notion
Words: 14148 - Pages: 57
The main difference is with the cost of goods sold. Service companies usually won’t have a cost of goods sold as they aren’t selling a product, they are selling an idea. One major tipoff that you’re a service type of company is if you don’t have any appreciable inventory. Most service type companies only make purchases for the job at hand so they won’t carry an inventory – purchases will be expensed. If they do retain some purchases, the amount is inconsequential especially when compared to
Words: 353 - Pages: 2
