INTERMEDIATE ACCOUNTING-MYLAB W/ETEXT
3rd Edition
ISBN: 9780136946601
Author: GORDON
Publisher: PEARSON
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Chapter 21, Problem 21.2MC
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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.
Both IFRS and U.S. GAAP apply the lower of cost or market method for reporting inventory values. If inventory is written down from applying the lower of cost or market method, explain in general terms how IFRS and U.S. GAAP differ in accounting for any subsequent period reversal of that reported decline in inventory value.
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
Chapter 21 Solutions
INTERMEDIATE ACCOUNTING-MYLAB W/ETEXT
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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- According to India accounting standards LIFO inventory valuation is Select one: a. Amortized O b. Permitted O c. Not used O d. Not permittedarrow_forwardRustic 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_forward
- Under IFRS, which of the following methods is not acceptable for the valuation of inventory? a. LIFO. b. FIFO. c. Average cost. d. Specific identificationarrow_forwardWhat inventory costing methods are allowed under IFRS? How does this differ from the treatment under U.S. GAAP?arrow_forwardCarey Company adheres to U.S. GAAP, whereas Jonathan Company adheres to IFRS. Itis least likely that:A. Carey has reversed an inventory write-down.B. Jonathan has reversed an inventory write-down.C. Jonathan and Carey both use the FIFO inventory accounting method.arrow_forward
- Question: 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_forwardCarrying 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_forward
- which 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_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_forward
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