ts) An auditor recently asked an accounting manager to perform a LCM test on a batch of inventory. Since the manager would prefer to avoid the cost of a LCM test, what GAAP argument could she use to avoid performing the test? O The cost of the test would not outweigh the benefit of the result. O Why don't you perform the test? That's what we are paying you for. O I have no reason to believe future value has dropped below the historical cost. O The recorded cost accurately represents the costs when the inventory was produced.

Identify all false statements about changes in accounting principles and estimates. 1. Investors likely prefer the retrospective approach as it is best for comparability across reporting periods. 2. Companies likely prefer the prospective approach as it is the least costly to apply. 3. Voluntary changes in accounting principle such as inventory-method change and depreciation- method change require the retrospective approach. 4. Change in estimated useful life of equipment should be accounted for prospectively. 5. Good justifications from investors' viewpoint for a voluntary change in accounting principle is th the change increases earnings and is less costly to implement. 6. "Taking earnings bath" is more likely during a good year or the year of management change. O 3, 5, 6 O 1, 2, 4 2, 3, 4 O 5 & 6

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What is the main criticism of LIFO? A. It presents a balance sheet figure that is out-of-date. B. It artificially creates a higher income. C. It utilizes a unit cost that has no evidence of existence. D. It is often complicated to implement, especially if inventory costs change frequently.

4. The cost of an asset and its fair value are Select answer from the options below: a) irrelevant when the asset is used by the business in its operations. b)never the same. c) the same on the date of acquisition. d) the same when the asset is sold. 6. If the sum of the debit column equals the sum of the credit column in a trial balance, it indicates Select answer from the options below: a. no errors can be discovered. b. no errors have been made. c. the mathematical equality of the accounting equation. d . that all accounts reflect correct balances. 7. The final step in the recording process is to Select answer from the options below: a. enter the transaction in a journal. b. prepare a trial balance. c. transfer journal information to ledger accounts. d. analyze each transaction. 8. The time period assumption states that Select answer from the options below: a. the economic life of a business can be divided into artificial time periods. b. estimates should not be made if a…

Discuss how the inventory process supports the production planning process and the risks to the production process if inventory process control goals are not achieved. do not limit your discussion to losses from fraud.