Asked by Kanisha Branner on May 18, 2024
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If a company changes its inventory valuation method the effect of the change on net income should be disclosed in the financial statements.
Inventory Valuation Method
The approach a company uses to determine the cost of its inventory, affecting the cost of goods sold and profitability; common methods include FIFO, LIFO, and weighted average.
Financial Statements
Formal reports detailing the financial activities and condition of a business, including the balance sheet, income statement, and cash flow statement.
Net Income
The total earnings of a company after subtracting all expenses, including taxes and operating costs.
- Comprehend the implications of inventory costing methods on financial statements.
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Learning Objectives
- Comprehend the implications of inventory costing methods on financial statements.
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