Question: you have learned that inventory may be written down to its current replacement cost or its net realizable value if these amounts are lower than

you have learned that inventory may be written down to its current replacement cost or its net realizable value if these amounts are lower than original cost. Why do you think the accounting profession has decided to violate the cost concept and reduce the value of inventory in these circumstances?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Quake Corporation paid $1,680,000 for a 30 percent interest in Tremor Corporation's outstanding voting stock on January 1, 2011. The book values and fair values of Tremor's assets and liabilities on...

Week 6 Discussion Please note that this discussion board will require a minimum of three posts. These consist of your initial post, your response to comments that I post to your thread, and at least...

Topic: Inventory Valuation In your textbook Chapter 1, you have learned that the concept of "Cost Principle", which accounting Standards require accountants to record all items purchased at their...

Modules Discussions Assignments Grade Students Canvas IntroHow to set HELP ConferZoom Practice critical thinking skills by writing a response to the flowing question In Chapter 1. you learned that...

Chapter 7: Inventory Additionally, please refer to Chapter 7 in your Cengage Accounting eText, accessible from the eText link in the Course Navigation Panel to the left of your screen. Requirement 1:...

Requirement 1: The inventory at the end of the year was understated by $14,750. (a) Did the error cause an overstatement or an understatement of the gross profit for the year? (b) Which items on the...

Why is it important to take a physical inventory periodically when using a perpetual inventory system? In Financial Accounting I, you learned that the cost concept of accounting requires accountants...

In readings you have learned that inventory may be written down to its current replacement cost or its net realizable value if these amounts are lower than original cost. Why do you think the...

You have learned that inventory may be written down to its current replacement cost or its net realizable value if these amounts are lower than original cost. Why do you think the accounting...

This is used to provide an optimal mix of relevant and reliable information in the financial statements. Answer 1 Question 2 Choose...recognitioncurrent value methodhistorical methodMixed attribute...

Calculator Investment Reporting Investments reported on the balance sheet at amortized cost include: I. Held-to-maturity securities. II. Available-for-sale securities. III. Trading securities. a. I...

1) Which bacteria do you expect to be more resistant to chemicalagents, acid fast or non acid-fast bacteria? Why? 2) : In the Gram Stain, the mordant used to fix the dye withinthe cells was Grams...

Lucas Clinics last dividend (Do) was $1.50. Its current equilibrium stock price is $15.75, and its expected growth rate is a constant 5 percent. If the stockholders required rate of return is 15...

Which of the following is NOT a characteristic of epithelium? Spread out cells in a non - cellular matrix Attached to a basement membrane Two distinct sides of cells, apical and basolateral Organized...

Troy Engines, Limited, manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An...

3. Western Europe seems to be uniquely involved with various forms of worker participation. What are some reasons that these worker participation systems have developed so fully there instead of...

1. Evaluate the exchange rates and wage rates shown in Exhibit 14.1 and decide where you should dock your ship for local production. You are the owner of a small North Carolina factory that makes...

6. Which features of Canadas labor relations system would you transfer to the United States?