Question 10 The lower-of-cost-or-market practice is based on the entity concept. conservatism principle. reliability principle. historical...

Question

Question

Question 10 The lower-of-cost-or-market practice is based on the entity concept. conservatism principle. reliability principle. historical...

Question 10

The lower-of-cost-or-market practice is based on the

entity concept.

conservatism principle.

reliability principle.

historical cost concept.

consistency principle.

business accounting

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

The answer is conservatism principle.

Conservatism principle states that anticipated expenses should be recognized but not revenues

Hence, the value of inventory is recognized at lower of cost or market value

Historical concept states that historical cost should be used

Consistency principle states that accounting policies used should be consistent over time

Entity concept states that entity is different from its owners

Add a comment

Answer 2

Similar Homework Help Questions

Define the entity concept and the historical cost concept of financial accounting.

Define the entity concept and the historical cost concept of financial accounting.
Define the entity concept and the historical cost concept of financial accounting.

Define the entity concept and the historical cost concept of financial accounting.
The historical cost principle states that activities of an entity are to be kept separate and...

The historical cost principle states that activities of an entity are to be kept separate and distinct from its owner. assets should be recorded at their cost. only transaction data capable of being expressed in terms of money be included in the accounting records. assets should be initially recorded at cost and adjusted when the fair value changes.

Question 1 Explain the following accounting concepts: (10 marks) a. Business entity concept b. Matching concept...

Question 1 Explain the following accounting concepts: (10 marks) a. Business entity concept b. Matching concept c. Going concern d. Accruals concept e. Consistency concept
1> The use of the lower of cost or market method to value inventory for reporting...

1> The use of the lower of cost or market method to value inventory for reporting purposes is related to the accounting principle of: A. verifiability B. conservatism C. matching D. historical cost 2> The size of the LIFO cash flow advantage depends on all of the following EXCEPT A. days of inventory B. tax rate C. severity of input cost change D. rapidity of fixed asset turnover
Match the accounting principle on the left with the appropriate statement on the right. Entity assumption...

Match the accounting principle on the left with the appropriate statement on the right. Entity assumption a. All relevant information must be presented in the financial statements. Materiality b. X Corp. uses FIFO every year to value its inventory. Full disclosure c. Carefully make estimates to avoid overstating assets or net income. Consistency d. Sales are recorded when the product is provided, not when we get paid. Historical cost e. The business plans to continue indefinitely. Conservatism f. John's personal...

Problem 1 Fill in the blanks below with the accounting principle that best applies. A. Cost...

Problem 1 Fill in the blanks below with the accounting principle that best applies. A. Cost B. Business Entity C. Going Concern D. Unit of Measurement E. Objective Evidence F. Full Disclosure G. Consistency H. Matching I. Conservatism J. Materiality 1.A lodging company pays a fire insurance premium of $40,000. The policy covers a two-year period. The 2.A guestroom wastebasket costing $20 is expensed when it is purchased. The wastebasket should have a 3.The food inventory is generally valued at...
ki , survey of Accounting, le Help System Announcements Historical cost principle Materiality Monetary unit assumption...

ki , survey of Accounting, le Help System Announcements Historical cost principle Materiality Monetary unit assumption Exercise 4-2 Identify the accounting concept that describes each situation below. Do not use any concept more than once. Periodicity assumption (a) is the rationale for why plant assets are not reported at liquidation value. (Do not use the historical cost principle.) Revenue recognition principle (b) indicates that personal and business recordkeeping should be separately maintained. Full disclosure principle (c) Ensures that all relevant...
QUESTION 9 Under the lower-of-cost-or-market basis in valuing inventory, market is defined as a. current replacement...

QUESTION 9 Under the lower-of-cost-or-market basis in valuing inventory, market is defined as a. current replacement cost. b. selling price. C. historical cost plus 10%. d. selling price less markup.

Know the concept and calculation of lower-of-cost-or-market Know the concept and calculations for methods of depreciation...

Know the concept and calculation of lower-of-cost-or-market Know the concept and calculations for methods of depreciation – S/L, Declining Balance, Units of Production (Activity), Sum of the Years Digits Know the concept and calculation for asset impairme

Question 10 The lower-of-cost-or-market practice is based on the entity concept. conservatism principle. reliability principle. historical...

Homework Answers

Add Answer to:
Question 10 The lower-of-cost-or-market practice is based on the entity concept. conservatism principle. reliability principle. historical...

Post as a guest

Earn Coins

Define the entity concept and the historical cost concept of financial accounting.

Define the entity concept and the historical cost concept of financial accounting.

The historical cost principle states that activities of an entity are to be kept separate and...

Question 1 Explain the following accounting concepts: (10 marks) a. Business entity concept b. Matching concept...

1> The use of the lower of cost or market method to value inventory for reporting...

Match the accounting principle on the left with the appropriate statement on the right. Entity assumption...

Problem 1 Fill in the blanks below with the accounting principle that best applies. A. Cost...

ki , survey of Accounting, le Help System Announcements Historical cost principle Materiality Monetary unit assumption...

QUESTION 9 Under the lower-of-cost-or-market basis in valuing inventory, market is defined as a. current replacement...

Know the concept and calculation of lower-of-cost-or-market Know the concept and calculations for methods of depreciation...

		entity concept.
		conservatism principle.
		reliability principle.
		historical cost concept.
		consistency principle.

Question 10 The lower-of-cost-or-market practice is based on the entity concept. conservatism principle. reliability principle. historical...

Homework Answers

Add Answer to: Question 10 The lower-of-cost-or-market practice is based on the entity concept. conservatism principle. reliability principle. historical...

Post as a guest

Earn Coins

Add Answer to:
Question 10 The lower-of-cost-or-market practice is based on the entity concept. conservatism principle. reliability principle. historical...