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Anna007 [38]
3 years ago
13

At the end of a reporting period, a company determines that its ending inventory has a cost of $300,000 and a net realizable val

ue of $230,000. What would be the effect(s) of the adjustment to write down inventory to net realizable value?
Business
1 answer:
Maksim231197 [3]3 years ago
7 0

Answer:

1.Cost of Goods Sold Increase by $70,000

2.Gross Profit and Net Profit decrease by $70,000

3.Inventory in balance sheet decrease by $70,000

Explanation:

IAS 2 requires inventory to be measured at the lower of cost or net realizable value.

In our case the inventory will be valued at net realizable value of $230,000 because this is lower.

The effect with this is :

1.Cost of Goods Sold Increase by $70,000

2.Gross Profit and Net Profit decrease by $70,000

3.Inventory in balance sheet decrease by $70,000

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Answer:

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permanent account.

Explanation:

The allwoance is an account used to adjust accounts receivable to a net value therefore, it is used as contra-asset (to adjust an asset)

Therefore, as assets normal balance is debit a contra-assets in order to adjsut will use credit balance.

<em>Notice:</em> contra-assets decrease the net value of the assets They never increase it. If the princip0al asset increase then, the accounting would use the main asset account, not the contra-asset

Lastly, as it adjsut an asset it will be find in the balnce sheet or in the note to the balance sheet to disclosure the procedure to arrive to net accounts receivables

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Updating accounts receivable is part of which transaction cycle?
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Updating accounts receivable is part of revenue cycle.

The procedure used by healthcare systems in the United States and around the world to track patient income, from their initial appointment or encounter with the healthcare system to their final payment of debt, is known as revenue cycle management (RCM). It is a typical component of healthcare management.

What is revenue cycle?

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  • Healthcare providers can outsource their revenue cycle management to businesses that handle this complex process with specialized agents and proprietary technologies to manage healthcare provider revenue cycles because the revenue cycle process is complex and subject to regulatory supervision.

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mr Goodwill [35]

Answer:

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So the interviewer

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