Homework Help is Here – Start Your Trial Now!
Business
Accounting
Part A - FIFO vs LIFO In comparing and contrasting FIFO vs. LIFO inventory procedures, the following listing was developed. You are to complete the tabulation with an answer of "YES" or "NO" as demonstrated by the first item. Any combination of yes, no answers is possible in each situation. With the exception of #9, assume no LIFO liquidations. FIFO YES Rart R LIFO NO 0 Usually matches the actual physical flow of goods 1 If used for tax purposes, it must be used for financial reporting purposes. 2 Improves cash flow in periods of rising prices. 3 Tends not to include the effects of rapidly rising (or falling) prices on the income statement 4 Income figure is more “real” in that it doesn't contain "paper profits." 5 A change to this method must be justified in the annual report disclosure notes. 6 Perpetual inventory results may be different from periodic inventory results 7 Is acceptable to the IRS (i.e., for income tax purposes). 8 Emphasizes the income statement in that it matches the recent costs with revenues 9 Possibility of liquidating the base may be a significant negative aspect. 10 Emphasizes the balance sheet in that the more recent costs are contained in the inventory account

Part A - FIFO vs LIFO In comparing and contrasting FIFO vs. LIFO inventory procedures, the following listing was developed. You are to complete the tabulation with an answer of "YES" or "NO" as demonstrated by the first item. Any combination of yes, no answers is possible in each situation. With the exception of #9, assume no LIFO liquidations. FIFO YES Rart R LIFO NO 0 Usually matches the actual physical flow of goods 1 If used for tax purposes, it must be used for financial reporting purposes. 2 Improves cash flow in periods of rising prices. 3 Tends not to include the effects of rapidly rising (or falling) prices on the income statement 4 Income figure is more “real” in that it doesn't contain "paper profits." 5 A change to this method must be justified in the annual report disclosure notes. 6 Perpetual inventory results may be different from periodic inventory results 7 Is acceptable to the IRS (i.e., for income tax purposes). 8 Emphasizes the income statement in that it matches the recent costs with revenues 9 Possibility of liquidating the base may be a significant negative aspect. 10 Emphasizes the balance sheet in that the more recent costs are contained in the inventory account

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
Part A - FIFO vs LIFO In comparing and contrasting FIFO vs. LIFO inventory procedures, the following listing was developed. You are to complete the tabulation with an answer of "YES" or "NO" as demonstrated by the first item. Any combination of yes, no answers is possible in each situation. With the exception of #9, assume no LIFO liquidations. FIFO YES Rart R LIFO NO 0 Usually matches the actual physical flow of goods 1 If used for tax purposes, it must be used for financial reporting purposes. 2 Improves cash flow in periods of rising prices. 3 Tends not to include the effects of rapidly rising (or falling) prices on the income statement 4 Income figure is more “real” in that it doesn't contain "paper profits." 5 A change to this method must be justified in the annual report disclosure notes. 6 Perpetual inventory results may be different from periodic inventory results 7 Is acceptable to the IRS (i.e., for income tax purposes). 8 Emphasizes the income statement in that it matches the recent costs with revenues 9 Possibility of liquidating the base may be a significant negative aspect. 10 Emphasizes the balance sheet in that the more recent costs are contained in the inventory account
Transcribed Image Text:Part A - FIFO vs LIFO In comparing and contrasting FIFO vs. LIFO inventory procedures, the following listing was developed. You are to complete the tabulation with an answer of "YES" or "NO" as demonstrated by the first item. Any combination of yes, no answers is possible in each situation. With the exception of #9, assume no LIFO liquidations. FIFO YES Rart R LIFO NO 0 Usually matches the actual physical flow of goods 1 If used for tax purposes, it must be used for financial reporting purposes. 2 Improves cash flow in periods of rising prices. 3 Tends not to include the effects of rapidly rising (or falling) prices on the income statement 4 Income figure is more “real” in that it doesn't contain "paper profits." 5 A change to this method must be justified in the annual report disclosure notes. 6 Perpetual inventory results may be different from periodic inventory results 7 Is acceptable to the IRS (i.e., for income tax purposes). 8 Emphasizes the income statement in that it matches the recent costs with revenues 9 Possibility of liquidating the base may be a significant negative aspect. 10 Emphasizes the balance sheet in that the more recent costs are contained in the inventory account
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
steps

Unlock instant AI solutions

Tap the button
to generate a solution

SEE SOLUTION
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS