FIFO method: FIFO Stands for First In First Out. Under this method, the units purchased first are assumed to be sold first and cost of goods sold is calculated accordingly. The ending inventory in the method includes the latest units purchased. LIFO method: LIFO Stands for Last In First Out. Under this method, the latest units purchased are assumed to be sold first and cost of goods sold is calculated accordingly. The ending inventory in the method includes the oldest units purchased. Specific identification method: Under this method the cost of goods sold and ending inventory units are identifiable and the cost is calculated accurately for each unit sold and in the inventory. Weighted Average method: Under this method, the cost per unit of the inventory is calculated as weighted average cost per unit and the cost of goods sold and inventory is calculated with the help of weighted average cost per unit. To choose: The correct method that results in a more realistic amount of income because it matches the most current costs against revenue.
FIFO method: FIFO Stands for First In First Out. Under this method, the units purchased first are assumed to be sold first and cost of goods sold is calculated accordingly. The ending inventory in the method includes the latest units purchased. LIFO method: LIFO Stands for Last In First Out. Under this method, the latest units purchased are assumed to be sold first and cost of goods sold is calculated accordingly. The ending inventory in the method includes the oldest units purchased. Specific identification method: Under this method the cost of goods sold and ending inventory units are identifiable and the cost is calculated accurately for each unit sold and in the inventory. Weighted Average method: Under this method, the cost per unit of the inventory is calculated as weighted average cost per unit and the cost of goods sold and inventory is calculated with the help of weighted average cost per unit. To choose: The correct method that results in a more realistic amount of income because it matches the most current costs against revenue.
Solution Summary: The author explains the FIFO method, LIFO, and Weighted Average methods, which results in a more realistic amount of income.
FIFO Stands for First In First Out. Under this method, the units purchased first are assumed to be sold first and cost of goods sold is calculated accordingly. The ending inventory in the method includes the latest units purchased.
LIFO method:
LIFO Stands for Last In First Out. Under this method, the latest units purchased are assumed to be sold first and cost of goods sold is calculated accordingly. The ending inventory in the method includes the oldest units purchased.
Specific identification method:
Under this method the cost of goods sold and ending inventory units are identifiable and the cost is calculated accurately for each unit sold and in the inventory.
Weighted Average method:
Under this method, the cost per unit of the inventory is calculated as weighted average cost per unit and the cost of goods sold and inventory is calculated with the help of weighted average cost per unit.
To choose:
The correct method that results in a more realistic amount of income because it matches the most current costs against revenue.
I need assistance with this general accounting question using appropriate principles.
I need the correct answer to this general accounting problem using the standard accounting approach.
Use the information provided to answer following question
Larry Ltd. is a registered VAT taxpayer. His business transactions for the months of January to March are included below. The VAT rate is 12.5%. All the amounts given are VAT inclusive.
Months
Sales
Purchases
Imports
January
$50,625
$30,375
$17,662.50
February
$63,337.50
$38,475
$25,087.50
March
$67,500
$52,312.50
$22,612.50
What is the Larry Ltd. VAT output tax for the 3 months period?
A.$20,152.50
B.$7,037.50
C.$5,812.50
D.$20,162.50
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