Questions from Intermediate Accounting

Q: What objections can be raised to the use of the specific identification

What objections can be raised to the use of the specific identification method?

Q: Refer to Practice 10-18. Company A’s competitor, Company

Refer to Practice 10-18. Company A’s competitor, Company B, had sales for the year totaling $360,000. The net property, plant, and equipment balance at the beginning of the year was $200,000; the endi...

Q: What advantages are there to using the average cost method of inventory

What advantages are there to using the average cost method of inventory valuation?

Q: Which better matches the normal physical flow of goods—FIFO or

Which better matches the normal physical flow of goods—FIFO or LIFO? Which better matches current costs and current revenues?

Q: (a) Under what conditions is a LIFO layer created?

(a) Under what conditions is a LIFO layer created? (b) What is meant by “LIFO reserve”?

Q: (a) What is the LIFO conformity rule? (

(a) What is the LIFO conformity rule? (b) How has the rule changed since it was first adopted?

Q: General Motors’ finished goods inventory is composed primarily of automobiles. Are

General Motors’ finished goods inventory is composed primarily of automobiles. Are automobiles always classified as “inventory” on the balance sheets of all companies? Explain.

Q: Assume there is no change in the physical quantity of inventory for

Assume there is no change in the physical quantity of inventory for the current accounting period. During a period of rising prices, which inventory valuation method (LIFO or FIFO) will result in the...

Q: The use of lower of cost or market is an unnecessary continuation

The use of lower of cost or market is an unnecessary continuation of the tradition of conservative accounting. Comment on this view.

Q: Why are ceiling and floor limitations on replacement cost considered necessary?

Why are ceiling and floor limitations on replacement cost considered necessary?