Intermediate Accounting, Student Value Edition (2nd Edition)
2nd Edition
ISBN: 9780134732145
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Chapter 21, Problem 21.2MC
To determine
The correct option.
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If circumstances indicate that an inventory write-down is no longer appropriate: a. The write-down can be reversed under U.S. GAAP. b. The write-down can be reversed under IFRS. c. The write-down can be reversed under both U.S. GAAP and IFRS. d. The write-down can’t be reversed under either U.S. GAAP or IFRS.
Which U.S. GAAP principle or rule would apply if the net realizable value of acompany’s inventory is below its original cost?a. Lower-of-cost-or-market ruleb. Consistency principlec. Disclosure principled. Historical cost principle
According to India accounting standards LIFO
inventory valuation is
Select one:
a. Amortized
O b. Permitted
O c. Not used
O d. Not permitted
Chapter 21 Solutions
Intermediate Accounting, Student Value Edition (2nd Edition)
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 - Change in Accounting Principle, Inventory. Massi...Ch. 21 - Change in Accounting Principle, Long-Term...Ch. 21 - Prob. 21.3ECh. 21 - Change in Accounting Principle, Inventory. Winthur...Ch. 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 - Change in Accounting Principle, Inventory. Second...Ch. 21 - Prob. 21.2PCh. 21 - Prob. 21.3PCh. 21 - Prob. 21.4PCh. 21 - Prob. 21.5PCh. 21 - Change in Estimate, Inventory, Bad Debt Expense....Ch. 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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- 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.arrow_forwardRequired: Match the following statements 1-10 the appropriate code letter A-C Statements 1-10 are as follows: Change due to understatement of inventory Change due to charging a new asset directly to an expense account Change from expensing to capitalizing certain costs, due to a change in periods benefited Change from FIFO to average cost inventory procedures Change due to failure to recognize an accrue (un-collected) revenue Change in amortization period for an intangible asset Change in expected recovery of an account receivable Change in the loss rate on warranty costs Change due to failure to recognize and accrue income Change in residual value of depreciable plant asset Codes A-C are as follows: A. Change in accounting policy B. Change in accounting estimate C. Error correction Statements 1-10 Codes A-C (select ONE code per statement) 1 2 3 4 5 6 7 8 9 10arrow_forwardUnder IFRS, which of the following methods is not acceptable for the valuation of inventory? a. LIFO. b. FIFO. c. Average cost. d. Specific identificationarrow_forward
- What inventory costing methods are allowed under IFRS? How does this differ from the treatment under U.S. GAAP?arrow_forwardQuestion: Which of the following inventory valuation methods assumes that the most recently acquired inventory items are sold first? A) FIFO (First-In, First - Out) B) LIFO (Last-In, First- Out) C) Weighted Average D) Specific Identificationarrow_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
- Carrying inventory at a value above its historical cost would most likely be permitted if:A. the inventory was held by a producer of agricultural products.B. financial statements were prepared using U.S. GAAP.C. the change resulted from a reversal of a previous write-down.arrow_forwardwhich of the following is not true regarding standards for interim reporting? a. declines in inventory value should be deferred to future interim periods b. use of the gross margin method for computing cost of goods sold must be disclosed c. costs and expenses not directly associated with interim revenue must be allocated to interim period on a reasonable basis d. gains and losses that arise in an interim period should be recognized in the interim period in which they arise if they would not normally be deferred at year endarrow_forwardState 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_forward
- Under 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_forwardAn 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_forward
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