The Evaluation Of Super Co

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Client Understanding “SUPER CO.” ACC 541 By: Jennifer Powell The evaluation of SUPER CO.’s financial correspondence, led to various items that need close attention. To serve the client with a distinct analysis of the items not clearly understood by management, provided below is an outline of the company’s inquiries. The analysis and ripostes provided should elaborate on the necessity of various accounting topics and situations. As well as, ensure SUPER CO. is affording the most preeminent financial statements in accordance with accounting guidelines and principles. • Adjusting lower cost of market inventory on valuation: Companies that record the cost of inventory at lower cost of market must record inventory cost at whichever is lower, original cost or current market price. It is usually used when inventory is obsolete or market price for the asset has declined. The rule is often useful when inventory has been held for a long period of time. When the market value is lower than cost the company will need to recognize the loss. If the write-down of the lower cost or market is minor, the expense charge can be applied to cost of goods sold. However if material or recurring it may be wise to track in a separate account, such as “Loss on LCM adjustment (AccountingTools.com, 2015).” Another common adjusting entry item is a contra asset inventory account “allowance to reduce inventory LCM.” It is used to report the amount inventory market is below inventory cost. The account
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