Questions from Financial Accounting

Q: How would reported income differ if LIFO rather than FIFO were used

How would reported income differ if LIFO rather than FIFO were used when purchase prices are rising? When purchase prices are falling?

Q: How would the balance sheet accounts be affected if LIFO rather than

How would the balance sheet accounts be affected if LIFO rather than FIFO were used when purchase prices are rising? When purchase prices are falling?

Q: The Sarbanes-Oxley Act increased top management’s responsibility for what?

The Sarbanes-Oxley Act increased top management’s responsibility for what?

Q: Garrison Corporation was closing its books on May 31, 2020.

Garrison Corporation was closing its books on May 31, 2020. Garrison’s accountant prepared a bank reconciliation as of May 31, 2020, and has found the following possible reconciling items between its...

Q: Why are inventories written down to the lower of cost or market

Why are inventories written down to the lower of cost or market?

Q: What is the effect on the current period income statement and the

What is the effect on the current period income statement and the balance sheet when inventories are written down using the lower of cost or market method? What is the effect on future period income s...

Q: What do the gross profit and inventory turnover ratios tell company management

What do the gross profit and inventory turnover ratios tell company management about inventory?

Q: What is the LIFO reserve, and when is it used?

What is the LIFO reserve, and when is it used?

Q: How does an error in the determination of ending inventory affect the

How does an error in the determination of ending inventory affect the financial statements of two periods?

Q: ‘‘For each inventory costing method, perpetual and periodic systems yield

‘‘For each inventory costing method, perpetual and periodic systems yield the same amounts for ending inventory and cost of goods sold.’’ Do you agree or disagree with this statement? Explain.