FIFO and LIFO accounting

them what is happening to the companyâs most important resource? A. Statement of cash flows B. Income statement C. Retained earnings statement D. Balance sheet Incorrect The correct answer is: A. Concept: GAAP (GENERALLY ACCEPTED ACCOUNTING PRINCIPLES) Concepts Mastery…

“A valuation method (e.g. LIFO, FIFO, average cost and specific identification) is used to compute the cost of the inventory dollar amounts and then it is compared to the market dollar amount.” LIFO is not commonly used because the last goods purchased are the first to be sold. The inventory at the beginning of the year will have the earliest goods purchased acquiring a valuation of an early price. FIFO is better used for lowering cost especially during periods of increase prices. It is also…

concise, the Financial Accounting Standards Board (FASB) created the Generally Accepted Accounting Principles (GAAP) which is a set of standards that includes a set of codes that provide structure and organization. (Spiceland, Sepe, & Nelson, 2013, pg. 10) Similarly, international countries have created their own set of accounting standards. However, in the past few decades, the United States and other countries have been getting into business with each other. The accounting standards between…

Different countries follow different accounting principles, GAAP is only used in the U.S., which led to the formation of IFRS that works as a common set of accounting principles used at an international level, between many different countries. One of the main challenges faced when expanding globally is the language and culture difference. Different…

Chapter 8: Problem 10 (Crude Oil Prices) Pricing and Accounting Policy Choices Predicted by the Bonus Plan and Debt Covenant Hypotheses of Positive Accounting Theory in Response to Increasing Crude Oil Prices Bonus plan hypothesis. The bonus plan theory asserts that managers will make financial accounting decisions in a way that best benefits them (Scott, 2012). When managers are faced with the decisions that affect their own bonuses, they will take into consideration current and future…

a) The committee on accounting procedure, CAP, that has been in operation from 1939m to1959, was a natural development of the AICPA(then known as AIA)Committee, that was in existed during 1933 to 1938. The committee was formed as a result of the financial crisis that were experienced during 1929 and the years after that. The power to issue pronouncements on matter of accounting principles and procedure was based on the grounds that AIPCA had the power to establish practices that would be…

The Generally Accepted Accounting Principles also known as GAAP was adopted by the U.S. Securities and Exchange Commission (SEC). GAAP is a set of accounting principles public companies have to follow when preparing financial statements that are useful for creditors and investors. Financial Accounting Standards Board (FASB) has developed a framework to increase the effectiveness of disclosure footnotes. The financial disclosures can be required by GAAP or by the management team when preparing…

What is the meaning of GAAP and IFRS? GAAP is the abbreviation for generally accepted accounting principles. Which is the values and guidelines pointed out by the Financial Accounting Standards Board (FASB). IFRS stands for International Financial Reporting Standards which intel’s the accounting standards developed by the International Accounting Standards Board (IASB). Which is the global standard for the planning of shared company financial statements. The start of the U.S. GAAP and IFRS was…

corporation called Ruckman, Inc. and his very first task was given to him by the controller Martha Green. The task Martha gave him was to convert all of the financial statements from the ones used in the United States that is Generally Accepted Accounting Principles (GAAP) to International Financing Reporting Standards (IFRS) that is used in over a 100 countries. Moreover, the corporation is willing to convert its financial statements from U.S. GAAP to IFRS in order to start sharing reports with…

These strong governmental relationships contribute to the economy of trade between the nations as well. To go along with these relations there are the Joint Economic Commission and the Trade and Investment Promotion Forum that assists the trading relations. In the years 2013 and 2014 the United State was the number one destination of Swiss direct trade. In those two years over $200 million dollars was directly invested into the Unites States. The same can be said for the Unites State and their…