Answered: Fluctuations in unit volume, changes in…

Fluctuations in unit volume, changes in unit price or unit cost of goods sold and modifications in the sales mix of a firm's offerings are all causes for a decrease in which of the following

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A: The Answer :

Concept explainers

Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.

Question

Fluctuations in unit volume, changes in unit price or unit
cost of goods sold and modifications in the sales mix of a
firm's offerings are all causes for a decrease in which of the
following
Net Sales
Gross Margin
Trade Margin
Gross Sales
Net Margin

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QUESTION 33 Under generally accepted accounting principles, a company can choose among different cost flow assumptions for valuing cost of goods sold that can result in different income reporting. However, a company cannot frequently change the cost flow assumption adopted in order to measure the highest income possible because of the: conservatism principle. going concern principle. stable-dollar principle. consistency principle.
Which one of the following is an advantage of LIFO? a. In periods of rising prices, less income taxes are paid b. In periods of rising prices, more holding gains are reported in net income c. Record keeping and financial statement preparation are easier d. Conservative income statement and balance sheet disclousures result from falling prices
1. Which of the following shows the degree of operating leverage? The percentage change in the sales volume as the result of the percentage change in cost of the goods sold The percentage change in the net income as the result of the percentage change in the variable costs The percentage change in the sales volume as the result of the percentage change in the sales price The percentage change in the net inome as the result of the percentage change in the sales volume The percentage change in the operating income as the result of the percentage change in the sales volume
How should accounting be able to catch up with the high sales return rates, particularly on inventory management?
24. Under which method may companies manipulate their income by choosing which units to sell? a) FIFO b) LIFO c) Weighted Average d) Specific Identification
What does the inventory turnover period ratio measure? Select one: a.Profitability. b.The average time an organisation holds inventory. c.The liquidity of the firm. d.How much the firm's current assets could decrease and still leave it able to pay its current liabilities.
DONT GIVE ANSWER IN IMAGE FORMAT
A firm that uses LIFO accounting for inventory in times of rising investory costs will always report lower profit margins than if it used FIFO. Is this correct?
Which is not a potential problem of utilizing ratio analysis? A. trends and industry averages are historical in nature. B. financial data may be distorted due to price-level changes. C. firms within an industry may not use similar accounting methods. D. all of the above E. answer not given
Why would a company’s manager be concerned about the quantity of its purchases returns if its suppliers allow unlimited returns?
Which one of the following statements is true? a. Income manipulation is difficult under LIFO.b. Accounting principles do not require that the inventory cost flow approximate the physical flow of goods.c. Companies may use LIFO for tax purposes and FIFO in the financial statements.d. In periods of declining prices, LIFO will result in the payment of less income taxes.