Questions from Financial Accounting

Q: Barnes Books allows for possible bad debts. On May 7,

Barnes Books allows for possible bad debts. On May 7, Barnes writes off a customer account of $7,000. On September 9, the customer unexpectedly pays the $7,000 balance. Record the cash collection on S...

Q: Explain how LIFO generally results in lower income taxes payable when inventory

Explain how LIFO generally results in lower income taxes payable when inventory costs are increasing. What is the LIFO conformity rule?

Q: What is the difference between the timing of recording inventory transactions under

What is the difference between the timing of recording inventory transactions under the perpetual and periodic inventory systems?

Q: Explain how freight charges, purchase returns, and purchase discounts affect

Explain how freight charges, purchase returns, and purchase discounts affect the cost of inventory.

Q: Explain the method of reporting inventory at lower of cost and net

Explain the method of reporting inventory at lower of cost and net realizable value.

Q: How is cost of inventory determined? How is net realizable value

How is cost of inventory determined? How is net realizable value determined?

Q: Describe the entry to adjust from cost to net realizable value for

Describe the entry to adjust from cost to net realizable value for inventory write-downs. What effects does this adjustment have on (a) assets, (b) liabilities, (c) stockholders’ equity (or retaine...

Q: What is meant by the assertion that an example of conservatism in

What is meant by the assertion that an example of conservatism in accounting is recording inventory at the lower of cost and net realizable value?

Q: What is the inventory turnover ratio? What is it designed to

What is the inventory turnover ratio? What is it designed to measure?

Q: What is the primary distinction between a service company and a manufacturing

What is the primary distinction between a service company and a manufacturing or merchandising company?