Explain the appropriate accounting treatment required when a change in inventory method is made.

Q: How do inventory errors affect the financial statements.

A: The financial statements of the business includes the income statement and balance sheet.

Q: Why is it important to obtain shipping and receiving cutoff information during the inventory…

A: Cut-off Procedures:   The audit procedures applied to separate the transactions from one period to…

Q: Determine the effects of inventory errors on the financial statements.

A: If you understated ending inventory, your cost of goods sold will be overstated by the error amount,…

Q: Changing the method of inventory valuation should be reported in the financial statements under what…

A: Inventory- A manufacturing company's inventory is a critical current asset. Inventory refers to the…

Q: Explain the steps necessary to calculate and record LIFO Reserve, and consequential Write-Down under…

A: LIFO reserve refers to the inventory method which is defined as the difference among what the ending…

Q: If inventory errors are said to correct themselves, why are accounting users concerned when such…

A:

Q: Indicate the effects of inventory errors on the financial statements

A: Solution- 1-A merchandising company must be sure that it has properly valued its ending inventory.…

Q: Describe the types of errors in inventory.

A:

Q: Describe Change in Inventory Method and Inventory Errors.

A: Change in Inventory method:   Inventory change is the difference between the amount of last period's…

Q: Explain whether the physical inventory should be equal to the amount indicated by the inventory…

A: Solution Concept Perpetual inventory system : The inventory system where the inventory records are…

Q: Discuss and explain the major uses of the gross profit method of inventory estimation.

A: Generally  we get gross profit  after trading a/c prepared it means after net sales  minus net…

Q: according to which section (s) in the Accounting Act the inventory is assessed. Explain your reasons…

A: Inventory includes the goods available for sale in the normal course of business or the finished…

Q: What are the key factors that can lead to an under/overstatement of the inventory balance?

A: Answer: Inventory balances are sometimes overstated and sometimes understated.

Q: a) Discuss the reasons why a proper understanding of the free on board (FOB) terms is important when…

A: FOB is an abbreviation for free on board. Free on Board means the seller takes risk till the time…

Q: Discuss how a change to the LIFO method of inventory valuation is handled when it is impracticable…

A:

Q: Under the new revenue recognition standard, how is the sale of inventory recorded?

A: Revenue: It refers is the total amount of earnings generated from selling goods or rendering…

Q: What are the reasons for making an estimate of the value of ending inventory?

A: Inventory- It is the amount of those units which is not sold yet by the entity or the units which…

Q: When a company changes its inventory method to LIFO, an exception is made for the way accounting…

A: Explain the difference in the accounting treatment of a change to the LIFO inventory method from…

Q: Describe the effects of misstatement of ending inventory.

A:

Q: Are there different methods used to account for perpetual inventory?

A: Perpetual inventory is a continous estimation of the inventory balances based on our books of…

Q: In your own words, discuss the differences between a perpetual and periodic inventory system. Your…

A: Inventory is the current asset posted on the balance sheet of the company.

Q: what are the effects of inventory errors on the financial statements

A: Incorrect recording of Inventory balance results in the Inventory errors.

Q: adjustment to the perpetual inventory records. Give any entry record the final disposition of any…

A: Perpetual inventory system is the system of recording the level of inventory at a continuously means…

Q: following is accounted for prospectively? Change in reporting entity. Change in…

A: A change in an estimate is accounted for prospectively.

Q: What is the purpose of disclosing the difference between the reported LIFO inventory amounts and…

A: Perpetual and periodic inventory system: In merchandise business, there are two types of inventory…

Q: Describe the accounting treatment for a change in inventory method other than to LIFO.

A: Method of Inventory: Inventory refers to the current assets that a company expects to sell during…

Q: Where there is evidence that the utility of inventory goods, as part of their disposal in the…

A:

Q: Explain the accounting treatment of material inventory errors discovered in an accounting period…

A: Materials inventory: Material inventories are the primary materials which are used in the…

Q: Explain the appropriate accounting treatment required when an inventory error is discovered.

A: Assets: These are the resources owned and controlled by business and used to produce benefits for…

Q: company will be affected by the changes in inventory method

A: Inventory method is a retail accounting method used to estimate the value of a store’s merchandise.…

Q: Provide a critique of the accounting policy for inventory included in the financial statement in…

A: The accounting standard prescribes the accounting treatment for inventories and sets the guidelines…

Q: Under a perpetual inventory system, acquisition of inventory is dented to the purchases account.…

A: Under the perpetual inventory system, Inventory transection is charged through the merchandise…

Q: What is the difference between perpetual and periodic inventory system

A: Introduction:- The most important variation between the periodic and perpetual inventory systems is…

Q: Briefly contrast the accounting procedures in perpetual andperiodic inventory systems.

A: Following are the differences between accounting procedures in perpetual and periodic inventory…

Q: What are the origins and fundamental concepts underlying inventory problems? what are they explain…

A: Introduction:- Inventory management is a way of buying, keeping, and selling inventories – both raw…

Q: What makes the recording of inventory at its proper amount difficult on the financial statements?

A: Inventory is the current assets of the company. In a manufacturing concern, inventory includes the…