Questions from Intermediate Accounting

Q: Why should inventories be included in (a) a statement of

Why should inventories be included in (a) a statement of financial position and (b) the computation of net income?  

Q: What is the dollar-value method of LIFO inventory valuation?

What is the dollar-value method of LIFO inventory valuation? What advantage does the dollar-value method have over the specific goods approach of LIFO inventory valuation? Why will the traditional...

Q: What is the difference between a perpetual inventory and a physical inventory

What is the difference between a perpetual inventory and a physical inventory? If a company maintains a perpetual inventory, should its physical inventory at any date be equal to the amount indicate...

Q: What is a product financing arrangement? How should product financing arrangements

What is a product financing arrangement? How should product financing arrangements be reported in the financial statements?

Q: Where, if at all, should the following items be classified

Where, if at all, should the following items be classified on a balance sheet? (a) Goods out on approval to customers. (b) Goods in transit that were recently purchased f.o.b. destination. (c) La...

Q: At the balance sheet date, Clarkson Company held title to goods

At the balance sheet date, Clarkson Company held title to goods in transit amounting to $214,000. This amount was omitted from the purchases figure for the year and also from the ending inventory. W...

Q: Define “cost” as applied to the valuation of inventories.

Define “cost” as applied to the valuation of inventories.  

Q: Distinguish between product costs and period costs as they relate to inventory

Distinguish between product costs and period costs as they relate to inventory.

Q: Ford Motor Co. is considering alternate methods of accounting for the

Ford Motor Co. is considering alternate methods of accounting for the cash discounts it takes when paying suppliers promptly. One method suggested was to report these discounts as financial income w...

Q: Explain the following terms.(a) LIFO layer.

Explain the following terms. (a) LIFO layer. (b) LIFO reserve. (c) LIFO effect.