INTERMEDIATE ACCOUNTING-MYACCOUNTINGLAB
3rd Edition
ISBN: 9780136946533
Author: GORDON
Publisher: PEARSON
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Question
Chapter 21, Problem 21.2MC
To determine
The correct option.
Expert Solution & Answer
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Students have asked these similar questions
1. Which of the following are prohibited when accounting for inventory under U.S. GAAP?
a. FIFO method
b. Average cost method
c. Recovery of written down inventory
d. LIFO method
2. Under IFRS GAAP research costs and development costs (when product technologically and economically feasible) are
a. both capitalized
b. both expensed
c. research costs are expensed and development costs are capitalized
d. research costs are capitalized and development costs are expensed
Rustic Company has recognized an impairment loss on the value of inventory. If the inventory's value subsequently recovers,
under which accounting standards may Rustic revalue the inventory upward and recognize a gain?
A) Neither IFRS nor U.S. GAAP allows a recovery in inventory value to be recognized as
a gain.
B) IFRS allows a recovery in inventory value to be recognized as a gain, but U.S. GAAP
does not.
c) U.S. GAAP allows a recovery in inventory value to be recognized as a gain, but IFRS
does not.
Under IFRS, which of the following methods is not acceptable for the valuation of inventory? a. LIFO. b. FIFO. c. Average cost. d. Specific identification
Chapter 21 Solutions
INTERMEDIATE ACCOUNTING-MYACCOUNTINGLAB
Ch. 21 - Are accounting changes permitted in financial...Ch. 21 - How do firms report accounting changes under the...Ch. 21 - Prob. 21.3QCh. 21 - How do firms account for changes in accounting...Ch. 21 - Prob. 21.5QCh. 21 - Prob. 21.6QCh. 21 - Prob. 21.7QCh. 21 - Prob. 21.8QCh. 21 - Do accounting errors that self-correct within two...Ch. 21 - Does a firm need to correct an error that...
Ch. 21 - Prob. 21.1MCCh. 21 - Prob. 21.2MCCh. 21 - Prob. 21.3MCCh. 21 - Prob. 21.4MCCh. 21 - Prob. 21.5MCCh. 21 - Prob. 21.1BECh. 21 - Prob. 21.2BECh. 21 - Prob. 21.3BECh. 21 - Prob. 21.4BECh. 21 - Change in Accounting Principle, Long-Term...Ch. 21 - Prob. 21.6BECh. 21 - Prob. 21.7BECh. 21 - Prob. 21.8BECh. 21 - Prob. 21.9BECh. 21 - Prob. 21.10BECh. 21 - Prob. 21.11BECh. 21 - Prob. 21.12BECh. 21 - Prob. 21.13BECh. 21 - Prob. 21.14BECh. 21 - Prob. 21.1ECh. 21 - Prob. 21.2ECh. 21 - Prob. 21.3ECh. 21 - Prob. 21.4ECh. 21 - Prob. 21.5ECh. 21 - Prob. 21.6ECh. 21 - Error Analysis and Correction. Feinstein and...Ch. 21 - Prob. 21.8ECh. 21 - Prob. 21.9ECh. 21 - Prob. 21.10ECh. 21 - Prob. 21.1PCh. 21 - Prob. 21.2PCh. 21 - Prob. 21.3PCh. 21 - Prob. 21.4PCh. 21 - Prob. 21.5PCh. 21 - Prob. 21.6PCh. 21 - Prob. 21.7PCh. 21 - Cases Judgment Case Judgment Case: Materiality and...Ch. 21 - Prob. 1FSCCh. 21 - Surfing the Standards: Change in Accounting...Ch. 21 - Prob. 1BCC
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- What inventory costing methods are allowed under IFRS? How does this differ from the treatment under U.S. GAAP?arrow_forwardWhat are the exceptions to historical cost valuation of inventory allowed under generally accepted accounting principles?arrow_forwardWhich of the following is accounted for prospectively? Change in reporting entity. Change in the percentage used to determine warranty expense. Correction of an error. Changes from the weighted-average method of inventory costing to FIFO.arrow_forward
- State how each of the following items is reflected in thefinancial statements.(a) Change from FIFO to LIFO method for inventoryvaluation purposes.(b) Charge for failure to record depreciation in a previousperiod.(c) Litigation won in current year, related to prior period.(d) Change in the realizability of certain receivables.(e) Write-off of receivables.(f) Change from the percentage-of-completion to thecompleted-contract method for reporting net income.arrow_forwardUnder ASC Topic 606 for revenue recognition, which of the following factors is not an indicator of the principal/agent determination? A. Inventory risk. B. Credit risk. C. Shipping terms.arrow_forwardDiscuss the primary difference between U.S. GAAP and IFRS with respect to determining the cost of inventory.arrow_forward
- An example of a correction of an error is a change: a. From FIFO inventory valuation to the average method b. In the service life of property, plant and equipment c. From cash basis to accrual basis of accounting d. In the tax assessment related to a prior periodarrow_forwardIf the net realizable of an entity's inventories is less than its cost, the entry to adjust the balance of the inventory assuming the entity uses the allowance method will involve a A. Debit to inventory B. Debit to loss on inventory write-down C. Credit to inventory. D. Credit to loss on inventory write-downarrow_forwardWhich of the following statements is false regarding property, plant and equipment (PPE)? Group of answer choices A. PPE is reported as a non-current asset on the balance sheet B. PPE is not intended for resale C. PPE can also be referred to as "inventory" D. None of the other alternativesarrow_forward
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