In Relation to Inventory,differentiate Between the Flow of Cost and the Physical

question 122

Essay

In relation to inventory,differentiate between the flow of cost and the physical flow of goods.

---

Definitions:

Effective Tax Rate

The mean rate at which a person or business is charged with taxes, determined by dividing the total amount of taxes paid by the amount of income that is subject to tax.

Cost Method

A method of accounting for investments where the investment is recorded at cost and only dividend income is recognized.

Goodwill Impairment

A decrease in the value of goodwill, indicating that the acquired company is not performing as expected.

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life.