Offsetting Is the Practice of Showing the Net Amount of Related

question 36

Essay

Offsetting is the practice of showing the net amount of related assets and liabilities on the balance sheet, rather than showing each of the components separately. State and explain the pros and cons of offsetting assets against liabilities.

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Definitions:

Beginning Inventory

The amount of goods presented for buying at the initial stage of an accounting term.

Goods Available for Sale

The total quantity of goods that a company has in stock and is available to be sold, including both finished goods and those still in production.

Ending Inventory

Available goods for sale's value at an accounting period's termination.

Periodic Inventory System

An inventory accounting method where updates to inventory levels are made periodically, often at the end of a financial period.