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Generally accepted accounting principles require that the inventory of a company be reported at?
lower of cost or market
Does lower of cost or market value rule violate historical cost basis?
the cost principle GAAP (generally accepted accounting principles) is violated by using this method of inventory cost flow as is the principle of conservatism as using this method will create the largest amount of net income which is good to show shareholders, bad for tax purposes and contradicts these two GAAP's.
What is cost principle?
Accounting concept that goods and services purchased should be recorded at their historical cost and not at their current market value.
What is Market to market accounting standards?
I think you mean "Mark to Market" which is an accounting technique in which assets are valued at their current market value and not a previous value or future value. Mark to Market is also known as "Fair Value" accounting.
Which accounting principle requires all goods and services purchased be recorded at cost?
The accounting principle that requires all goods and services purchased to be recorded at cost is the Cost Principle, also known as the Historical Cost Principle. This principle mandates that assets be recorded at their original purchase price, ensuring that financial statements reflect the actual cost incurred by the business. This approach provides consistency and reliability in financial reporting, as it avoids the subjective nature of market value fluctuations.
What is the cost principle?
The cost principle is an accounting guideline that states that assets should be recorded based on the actual amount paid for them, rather than their market value or potential future value. This principle helps ensure that financial statements are reliable and reflects the actual cost incurred by a company to acquire its assets.
The Superior Company acquired a building for 500000. The building was appraised at a value of 575000. The seller had paid 300000 for the building 6 years ago. Which accounting principle would require?
The accounting principle that would require the building to be recorded at its acquisition cost of $500,000 is the historical cost principle. This principle states that assets should be recorded at the cost incurred to acquire them, regardless of their current market value or appraisal. Therefore, despite the building's appraised value of $575,000, it will be reflected on the balance sheet at the purchase price of $500,000.
How does Guam process food?
Pig farming, the principle agricultural activity in Guam, uses accepted methods of butchering and processing of pork products, in order to bring their products to the local market..
What is Historical cost principle?
The historical cost principle is an accounting principle that requires transactions and economic events to be valued in the financial statements at the actually dollar amounts involved when the transaction or economic event took place.For example if the market price of a teddy bear is $5.00 but you are able to bargain your way into getting it for $4.50, the historical cost principle requires that you record the teddy bear at $4.50.
How do you treat fixed assets in inflation accounting?
At current Market Value
What are 3 regulatory influences on the preparation published accounts?
Three key regulatory influences on the preparation of published accounts include International Financial Reporting Standards (IFRS), which provide a framework for consistent financial reporting; the Generally Accepted Accounting Principles (GAAP), which guide the accounting practices in specific jurisdictions like the U.S.; and the requirements set forth by regulatory bodies such as the Securities and Exchange Commission (SEC) in the U.S. These regulations ensure transparency, accuracy, and comparability in financial statements, helping to protect investors and maintain market integrity.
Should depreciation continue to be recorded on a building when ample evidence exists that the current market value is greater than original cost and the rising trend of market value is continuing?
Yes, depreciation should continue to be recorded on a building even if its current market value exceeds the original cost. Depreciation reflects the allocation of the asset's cost over its useful life, accounting for wear and tear, obsolescence, and usage, rather than fluctuations in market value. The accounting principle of conservatism dictates that financial statements should not overstate asset values, so recording depreciation remains appropriate regardless of market trends.
