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Accounting Notes- Day 13

Accounting Notes- Day 13 - approximates physical flow of...

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ACCOUNTING 2000 10/10/11 FIFO *For Cost of Goods Sold: begin at the top, work way down, oldest  goods sold first *For Inventory: start at bottom, most recent purchases LIFO *For Cost of Goods Sold: begin at the bottom, work way up,  newest goods sold first *For Inventory: start at top, work way down, oldest goods remain In rising prices, LIFO gives the lowest net income and lowest  income tax because it gives you the highest cost of goods sold In rising prices, FIFO gives the highest net income and highest  income tax because it gives you the lowest cost of goods sold Average Cost is always in the middle  CLICKER: which cost of flow assumption most often 
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Unformatted text preview: approximates physical flow of goods? FIFO Types of receivables:-amounts due from individual and other companies that are expected to be collected in cash-2 accounting issues: • Recognize accounts receivable • Valuing accounts receivable 1. Direct Write off (theoretically undesirable, no matching, receivable not stated at net realizable value) 2. Allowance method (better matching, receivable stated at net realizable value) Uncollectible accounts receivable-sales on account raise the possibility of accounts not being collected LOOK AT THE SLIDES ON MOODLE...
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