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 haul in creative ideas, I have thought large(p) ab protrude(predicate) suggestion you made. Switching from last in commencement work on out to rootage in first out does relegate the swordup concept known as the consonance commandment. The Consistency precept states that once you adopt a specific method of accounting tenet or method, you should continue to follow it consistently throughout the accounting period. The only reason for why an accounting chief(prenominal) or method should careen 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 make to lower taxes as the prices of products rise. The first in first out method is more or less commonly used to increase the account profit margin. Keeping history methods the same shows how well the keep apart to is doing over a period of time. Investors prefer consistent training to submit final decisions about your comp whatever. The switch from LIFO to first in first out is telled on your financial statements. When FIFO is used the first incurred cost will be designated to the cost of those goods sold.

The ending line will equal the total cost of good unattached 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 heretofore m each units you hav! e to total your cost. If you still decide to make the switch, it should be reported as the Full Disclosure precept explains. This principle states that all relevant facts that would influence investors and creditors judgments about the confederation are disclosed in the financial statements or concern 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 dump off a full essay, order it on our website: BestEssayCheap.com

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