Both USGAAP and IFRS Require Firms to Write Down Inventories When

question 54

True/False

Both U.S.GAAP and IFRS require firms to write down inventories when their replacement cost, or market value, declines below acquisition cost.

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Definitions:

Marginal Tax Rate

The rate of tax applied to your next dollar of income, used in progressive tax systems where tax rates increase as income rises.

Percentage Of Sales Approach

Financial planning method in which accounts are projected depending on a firm’s predicted sales level.

Net Income

The final profit figure for a company after deducting taxes and expenses from the revenue.

Dividend Payout Ratio

The dividend payout ratio is the fraction of net income a firm pays to its shareholders in dividends, expressed as a percentage of the company's total net income.