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Jones Co. is in a technology-intensive industry. Recently, one of its competitors introduced a new product...

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Question

Accounting

Jones Co. is in a technology-intensive industry. Recently, oneof its competitors introduced a new product with technology thatmight render obsolete some of Jones's inventory. The accountingstaff wants to follow the appropriate authoritative literature indetermining the accounting for this significant market event.

Instructions

(a) Identify the primary authoritative guidance for theaccounting for inventories.

(b) List three types of goods that are classified as inventory.What characteristic will automatically exclude an item from beingclassified as inventory?

(c) Define “market” as used in the phrase“lower-of-cost-or-market.”

(d) Explain when it is acceptable to state inventory above costand which industries allow this practice.

Answer & Explanation Solved by verified expert
3.6 Ratings (319 Votes)
a The primary authoritative guidance for accounting for inventories are FASB ASC 330 Subtopic 10 sub section 05 This guidance notes tells about accounting principles for reporting for inventory Financial significance of    See Answer
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