Match the items that follow with their related statements.
a. Inventory accounting
b. Goods flow
c. Cost flow
d. Lower-of-cost-or-market (LCM) rule
e. Valuation
f. Conservatism
1. Refers to the association of costs with their assumed flow.
2. Has the objective of matching costs of the period against revenues for the period.
3. Requires that the inventory be written down to the lower value and that a loss be recorded.
4. Refers to the actual physical movement of goods in the operations of a company.
5. Related to the lower-of-cost-or-market (LCM) rule.
6. Can vary depending on the assumptions about the flow of costs.

  • CreatedMarch 26, 2014
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