When merchandisers and manufacturers prepare income statements for their annual reports to shareholders, they usually begin the statement with net sales. For internal reporting purposes, however, the income state-ments will show gross sales and the related contra-revenue accounts of sales returns and allowances and sales discounts. What might explain this difference in the financial information disclosed to external parties and management? Do you consider the more limited disclosure

Q: 1. What are the main differences between perpetual and periodic inventory systems regarding…

A: Cost of Goods Sold: Cost of goods sold is the conveying worth of products sold during a specific…

Q: Which of the following users of accounting verifies accounting information to check the Tax…

A: Regulatory agencies check whether the company is complying with all the tax compliance of the…

Q: Alpha Co. reports inventory on its balance sheet using the same generally accepted methods as…

A: option C - Comparatibility Comparibility is used to enables usersto identify similarities and…

Q: Delaney Humphrey was explaining the importance of documentary evidence. Which assertion was she…

A: The audit is the detailed process of checking and verifying books of accounts and financial…

Q: Which of the following is least likely to be a procedure included in an accountant’s review of…

A: Interim financial information refers to the financial information of an entity or the statements of…

Q: attendance of the auditors during the physical inventory coun

A: Answered:

Q: Write an analysis of the five revenue-recognition steps.  Apply the five revenue-recognition steps…

A:

Q: What type of substantive testing (not test of controls) should be used for each of the following…

A: Substantive  testing is also known as substantive procedures, which are the procedures an auditor…

Q: Audit Procedures for Marketing and Advertising Expenses   Auditing marketing and advertising…

A: Audit is a process which ensures that the firm's expenses and financial statements strictly comply…

Q: Which of the following procedure is designed to prevent the company from ordering unnecessary items?…

A: D) Approval of purchase requisitions is the procedure designed to prevent the company from ordering…

Q: auditor’s written management representation

A: Option A is wrong because written representations are not made for cost-benefit justification.…

Q: Explain issues that analysts should consider when examining a company’s inventory disclosures and…

A: Inventory Disclosure: Inventory disclosure is useful for management to evaluate inventory…

Q: Briefly describe the guidelines provided by GAAP for the recognition of revenue by a franchisor for…

A: Franchise arrangement and performance obligation:   In a franchise transaction, the franchisor has…

Q: Ethics within inventory estimates and other creative accounting methods. Channel stuffing, swaps,…

A: Ethics implies the arrangement of rules that the association ought to follow. While in business,…

Q: Statement 1: Common to future purchase commitments is the fact that they should be recorded as…

A: Audit refers to inspection or examination of the financial statements of the company through auditor…

Q: Companies that sell inventory on the account have bad debts to deal with.  Explain how we can…

A: Meaning of Bad Debts: Bad debts expense is related to a company's current asset accounts receivable.…

Q: How harmed are small companies by the accounting requirements regarding uniformity and disclosure…

A: Uniformity The practice of mandating firms to enter financial data and create income reports in…

Q: A US Company can choose to report its financial statements using GAAP or IFRS Group of answer…

A: GAAP is the generally accepted accounting principles which are the set of rules and regulations, and…

Q: The accounting cycle differs depending on whether a company uses IFRS or ASPE accounting standards.…

A: The International financial reporting standards(IFRS) and Accounting standards for Private…

Q: Choose the correct. Under current U.S. accounting guidelines, which of the following items of…

A: Revenues generated from export sales information not required to disclose, even if it were material…

Q: 1)Which of the following is not an audit procedure for inventories? a)Review cut-off of inventory…

A: The objective of the first question is to identify the option that is not an audit procedure for…

Q: Do you agree with the following statements? Express your opinion on each statement. An inventory…

A: 1) This statement is correct  This can be explain with the help of example: Suppose closing stock is…

Q: Under what conditions should a company disclose the amount of sales from a major customer?

A: Sales: A sale refers to a transaction that take place between two parties where a buyer receives…

Q: Generally accepted accounting principles should be applied consistently from period to period.…

A: Changes in inventory: Change in inventory method is said to be the difference between the previous…

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: When auditing merchandise inventory at year-end, the auditor performs audit proceduresto obtain…

A: Given information is: When auditing merchandise inventory at year-end, the auditor performs audit…

Q: Briefly explain the "accrual basis assumption" and why financial statements are prepared under this…

A: As per our protocol we provide solution to the one question only but as you have asked multiple…

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.