Each of the Following Statements Is Justified by a Concept

question 145

Essay

Each of the following statements is justified by a concept or convention of accounting.Write the name of the concept or convention that applies to each statement.
a.This convention best enhances comparability of financial statements between years.
b.A merger agreed on just after the balance sheet date nevertheless is reported in the notes to the financial statements.
c.A company forgoes hiring another full-time accountant,which would add only slightly to the financial statements' accuracy.
d.A company uses lower-of-cost-or-market to value inventory.
e.A large company rounds its financial statement figures to the nearest $10,000.

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Definitions:

Turnover

Sales divided by average operating assets.

Manufacturing Cycle Efficiency

A metric that measures the efficiency of the manufacturing process by comparing the value-added production time to the total production time.

Non-value-added Time

Time spent in the production process that does not contribute to the end product's value or quality, often targeted for reduction in lean manufacturing practices.

Throughput Time

The amount of time it takes for a product to pass through a production process, from start to finish, including processing, inspection, and transit times.