List Arguments for and Arguments Against the Use of Historical

question 45

Essay

List arguments for and arguments against the use of historical cost, general price-level adjustment, exit value (net realizable value), and replacement cost (entry value). Explain why the discounted cash flow method is virtually impossible to apply in a real situation.

Recognize the components and application of the gross profit method for estimating inventory.

Understand the considerations for including items in merchandise inventory, accounting for special situations such as goods in transit, consigned goods, and damaged goods.

Describe the importance of internal controls during a physical inventory count.

Discuss the LIFO conformity rule and its implications for financial reporting.

---

Definitions:

Arbitrator's Decision

A final decision made by an arbitrator, who is a neutral third party, to resolve a dispute outside of court.

National Labor Relations Act

A foundational statute of US labor law which guarantees the rights of private sector employees to organize into trade unions, engage in collective bargaining, and take collective action such as strikes.

Strikes

Work stoppages initiated by employees to protest against poor working conditions, low pay, or other labor issues.

Federal Mediation

A dispute resolution process involving a neutral third party, often offered by the government, to assist in reaching a voluntary, negotiated resolution between parties in conflict.