(a) Introduction: The lower of cost or market rule follows the historical cost method as per Generally Accepted Accounting Principles accounting framework. The method states that the cost of inventory must be taken as the original cost or its current market price whichever cost is less as the inventory might have become obsolete, damaged or its value might have declined. To find: The amount of the inventory using lower cost or market applied on an item-by-item basis.
(a) Introduction: The lower of cost or market rule follows the historical cost method as per Generally Accepted Accounting Principles accounting framework. The method states that the cost of inventory must be taken as the original cost or its current market price whichever cost is less as the inventory might have become obsolete, damaged or its value might have declined. To find: The amount of the inventory using lower cost or market applied on an item-by-item basis.
Solution Summary: The author explains that the lower of cost or market rule follows the historical cost method as per Generally Accepted Accounting Principles accounting framework.
Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.
Chapter 6, Problem 69BPSB
To determine
(a)
Introduction:
The lower of cost or market rule follows the historical cost method as per Generally Accepted Accounting Principles accounting framework. The method states that the cost of inventory must be taken as the original cost or its current market price whichever cost is less as the inventory might have become obsolete, damaged or its value might have declined.
To find:
The amount of the inventory using lower cost or market applied on an item-by-item basis.
To determine
(b)
Introduction:
The lower of cost or market rule follows the historical cost method as per Generally Accepted Accounting Principles accounting framework. The method states that the cost of inventory must be taken as the original cost or its current market price whichever cost is less as the inventory might have become obsolete, damaged or its value might have declined.
To prepare:
The journal entry to value inventory at lower of cost or market.
To determine
(c)
Introduction:
The lower of cost or market rule follows the historical cost method as per Generally Accepted Accounting Principles accounting framework. The method states that the cost of inventory must be taken as the original cost or its current market price whichever cost is less as the inventory might have become obsolete, damaged or its value might have declined.
To state:
The impact of lower cost or market rule on financial statements and the impact of financial statement of a subsequent period in which inventory is sold.
Please given correct answer for General accounting question I need step by step explanation
The following VAT balances were extracted from the subsidiary journals of Africa Traders as at 28 February 2024.
R
Cash receipts journal
VAT input
556,50
VAT output
14 676,48
Cash payments journal
VAT input
9 375,12
VAT output
642,78
Purchases journal
VAT
6 260,40
Sales journal
VAT
8 037,12
Purchases returns journal
VAT
871,75
Sales returns journal
VAT
902,32
On 1 February 2024, the VAT input account had a debit opening balance of R14 768 and the VAT output account had a credit opening balance of R14 154.
Calculate the closing balance of the VAT output account as at 28 February 2024
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