Financial Accounting (MGT101)
Give arguments in favor of following statement.
“FIFO method for inventory valuation may increase income tax due as well as showing true financial position of a business with respect to inventory during the period of rising prices.”
Idea Solution:-
As in Period of Price rising, current market price of the inventory will be higher than the previous market price on which inventory was purchased by the business. If using FIFO method the lower value of inventry will be rocorded then the value of inventory consumed will not meet the current market position. As a result all the Expenses shown in the financial statements will be lower, profit will be higher which may cause increase in income tax due and the ending inventry will show a higher value.
Please do make changes in these assignment otherwise every one who copy this assignment as it is will awarded zero marks
NOTE: - These Assignments OR Quiz are just for idea, so kindly don't copy it, after viewing it make your own. Thanks We always try our best to upload 100% correct solution BUT it is requested that you kindly review it before submission, please BEST OF LUCK, Thanks to those students those send me Assignments and quizzes. If you have any Assignment and quiz kindly send at jamilbookcenter@yahoo.com
No comments:
Post a Comment