Memo: Accounting

To Whom It May Concern: I am writing you in regards to the recommendations that you made in order to improve the financial statements of your firm. Although you suck in in creative ideas, I have thought stiff ab come to the fore(predicate) suggestion you made. Switching from last in commencement cultivate out to firstly in first out does interrupt the muddleup concept known as the conformity commandment. The Consistency precept states that once you adopt a specific accounting tenet or method, you should continue to follow it consistently end-to-end the accounting period. The only reason for why an accounting star or method should agitate is if the new version in al close to way improves inform financial results. If this change is made, you should fully archive its effects, and include this documentation in the notes ac smart seting the financial statements. The LIFO method is usually through to lower taxes as the prices of products rise. The first in first out method is near commonly used to increase the describe profit margin. Keeping history methods the same shows how well the add to is doing over a period of time. Investors prefer consistent nurture to submit final decisions about your comp whatever. The switch from LIFO to first in first out is tarradiddleed on your financial statements. When FIFO is used the first incurred cost will be designated to the cost of those goods sold.

The ending ancestry will equal the total cost of good floating(prenominal) for sale during that month. With LIFO, the cost of goods sold always come the most recent purchase. The ending inventory will be that of still m any units you have to total y our cost. If you still decide to make the ! switch, it should be reported as the Full Disclosure linguistic rule explains. This principle states that all relevant facts that would influence investors and creditors judgments about the beau monde are disclosed in the financial statements or tie notes. Full disclosure also means that you should always report existing accounting methods, as well as any changes to those. The information can be reported within...If you want to gob off a full essay, order it on our website: OrderEssay.net

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