Accounting Problem
• How do the shipping terms (FOB shipping point and FOB destination) affect ownership of goods?
• What are terms and give an example of terms on an account.
• 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.
• 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.
• What is the lower-of-cost-or-market (LCM) basis of accounting for inventories? Describe the application of LCM.
• What is the inventory turnover ratio? How is it computed? How is it used by external users and management?
• What is the LIFO reserve? Explain its importance for comparing results of different companies.
The response should include a reference list. Using double-space, Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.