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katrin [286]
3 years ago
15

When inventories go down in value, accountants adjust the value of the inventory that is recorded on the balance sheet. Sometime

s inventory goes up in value. Do accountant's ever adjust the value of inventory upwards? What are the general guidelines that accountant's follow in recording inventory value?
Business
1 answer:
Ilia_Sergeevich [38]3 years ago
4 0

Answer:

Accountants do not adjust the value of inventory upwards.  The general guidelines in recording inventory value are to recognize the ending inventory value at the lower of cost or market value and to ensure that transactions are recorded in accordance with the conservatism principle of generally accepted accounting principles.

Explanation:

The conservatism principle requires that all probable losses are recognized as soon as they can be reasonably estimated, while gains should be recognized only when they are fully realized.  The lower of cost or market value (LCM) method states that inventory should be recorded at the lower of either the historical cost or the market value.  The LCM is in line with the conservatism principle.

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Which analytical tool determines the relative attractiveness of various strategies based on the extent to which key external and
mina [271]

Answer:

The correct answer is letter "E": Quantitative Strategic Planning Matrix (QSPM).

Explanation:

The Quantitative Strategic Planning Matrix (QSPM) is an approach used to combine different planning methods based on inputs obtained by the firm of possible ventures it could be involved in. The more strategies that can be comprised in the QSPM is likely to provide the best result for the company.

It is believed that QSPM helps internal and external factors that could influence a firm's plan to be analyzed properly, thus, the strategy to be pursued will be the fittest.

6 0
3 years ago
Marcus has decided to open an auto detailing business. He will pick up an automobile from the​ client, take it to his​ parents'
AleksAgata [21]

Answer:

A sole proprietor

Explanation:

His business is owned and run by one person, himself. There is no distinction between the owner and the business entity. It is possibly for him to hire emplyees is not required to do all the work.

Marcus receives all the profits and has responsiblity for the debts and losses which could arise from his enterprise. The debts of the autodetailing business are his.

7 0
3 years ago
The risk-free yield curve is flat at 6% per annum. What is the value of an FRA where the holder receives LIBOR at the rate of 9%
Fudgin [204]

Answer:

c. $8.63

Explanation:

Missing word <em>"The forward LIBOR rate is 7%. All rates are compounded semiannually.  A. $8.88 , B. $9.12 , C. $8.63 , D. $9.02"</em>

Principal = $1000, FRA Rate = 9 % per annum, LIBOR after 2 years = 7 % per annum, Compounding Frequency: Semi-Annual, Risk-Free Rate = 6 % per annum

The FRA matures 2 years or 24 months from now. Further, the Interest Rate that the FRA hedges will create an interest expense only at the end of the LIBOR loan period which is an additional 6 months after the 24 month period.

Hence, Exchange of Interest Expense at the end of 30 Months = (FRA Rate - LIBOR) x Principal (calculated on a semi-annual basis)

= (0.045 - 0.035) * 1000

= $10

Current Value of FRA = Present Value of Interest Expense at the end of the 30 Months Period

= 10 / [1+(0.06/2)]^(30/6)

= $8.6261

= $8.63

3 0
3 years ago
Perfect elasticity and zero elasticity refer to the same event, which occurs when quantity demanded or quantity supplied change
larisa86 [58]

Answer:

b

Explanation:

perfectly elasticity is when at an existing price quantity demanded can increase or decrease.the numerical co efficient is always infinity ♾️

5 0
3 years ago
From the standpoint of the issuing company, a disadvantage of using bonds as a means of long-term financing is that
kumpel [21]

Answer:

interest must be paid on a periodic basis regardless of earnings

Explanation:

Businesses need funds to operate and they sometimes issue bonds to get the needed bonds.

Bonds are debt instruments that are sold to investors to get funds. Interest is also paid to the bond buyer for the tenure of the bond.

The major disadvantage of using bonds as a source of bonds from the standpoint of the issuer is that interest must be paid on a periodic basis regardless of earnings.

6 0
3 years ago
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