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Chapter 6
1. How do the shipping terms (FOB shipping point and FOB destination) affect ownership of goods?
2. What are terms and give an example of terms on an account.
3. Explain the basis of accounting for inventories and apply the inventory cost flow methods- FIFO, LIFO, and average-cost-under a periodic inventory system. Discuss the differences between the physical movement of goods and cost flow assumptions.
4. Discuss the effects on the income statement and balance sheet and tax effects of each of the inventory cost flow assumptions-FIFO, LIFO, and average-cost.
5. What is the lower-of-cost-or-market (LCM) basis of accounting for inventories? Describe the application of LCM.
6. What is the inventory turnover ratio? How is it computed? How is it used by external users and management?
7. What is the LIFO reserve? Explain its importance for comparing results of different companies.
Attachment:- Chapter 6.rar
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