By the use of Lifo in a period where the prices rise, companies avoid to report paper profit, also called phantom profit, as economic gain. Have in mind that in periods of changing prices, the cost flow assumption can have a significant impact onincome and on evaluations based on income. That is why when Lifo is used the companies tend to <span>report the lowest net income </span>
The correct answer is a I a, typing to get the answer right
Answer:
the proper recording of this liability each year from 2016 through 2018 under GAAP is $150,000.
Explanation:
since the first amount cannot be determinable now, we cannot record it as a liability.
After the settlement of the dispute by the customer and company outside the court the company should record the loss and a liability at an amount of $150,000 because it is certain and determinable now.
Answer: The current ratio measures a company’s effectiveness in using fixed assets to support sales.
Explanation:
The statement regarding a financial statement analysis that is incorrect is option E "the current ratio measures a company’s effectiveness in using fixed assets to support sales".
The current ratio is used by a company to know if there are enough resources that are available in order to meet the short term obligations of the company.
This is done through the comparison of the current assets of the company to the current liabilities of the company.
Answer : ensure uninterrupted flows of raw materials at the lowest total cost, improve total cost,improve quality of the finished goods produced,and maximize customer satisfaction
