QUESTIONS AND ANSWERS FOR FINANCIAL ACCOUNTING 1

1. Current assets include cash and all other assets expected to become cash or
be consumed:
Within one year or one operating cycle, whichever is longer.

2. The allowance for uncollectible accounts is a:

Contra asset account

3. The net assets of a corporation are equal to:

Shareholders’ equity

4. Which of the following transactions has no effect on the profit presented in

the income statement for the period?
Paying dividends to shareholders

5. Cash flows from investing activities do not include:

Proceeds from issuing bonds.

6. In a perpetual inventory system, the cost of inventory sold:

Debited to cost of goods sold.

7. When a company purchases inventory on credit:Its quick ratio decreases.

8. Which of the following is not true about net operating cash flow?It is a
measure used in accrual accounting and is recognized as the best predictor of
future operating cash flow

9. What is the effect on each of the following accounts of the collection of an

account previously written off?
Allowance for uncollectible accounts: unchanged:
Accounts Receivable: unchanged -> DR 111,112/CR 711

10. Adjustment entries before closing the income statement are made based on
which accounting principle:Matching
11. In case of liquidation of fixed assets that are still of use value and cash
collection, the following accounts shall be recorded:Increase income, increase
costs

12. If a company has gone bankrupt, its financial statements likely violate: The
going concern assumption.

13. Inventory does not include: Equipment used in the manufacturing of assets for
sale.

14. Rent collected in advance is:A liability account in the statement of financial
position.

15. The difference between single-step and multiple-step income statements is

primarily an issue of: Reporting (presenting)

16. In comparing the direct method with the indirect method of preparing the
statement of cash
flows: Only operating activities are presented differently.
17. A company reported cost of goods sold of $2,000,000 this year. The inventory
account increased by $200,000 during the year to an ending balance of $400,000.
What was the cost of merchandise that the company purchased during the
year?$2,200,000. (2,000,000+200,000)

18. Inventory was acquired in 2013 at a cost of $40,000. A qualified appraiser

placed its value at $48,000, and a recent firm offer for the inventory was for a
cash payment of $46,000. The inventory should be reported in the financial
statements at: $40,000. (the min of cost
and NRV)

19. Accounts receivable are normally reported at the: Net amount to be received.

20. At the beginning of October, the company shipped out the shipment for sale
with a total selling price of VND 100,000,000. Due to a promotion program, the
company offers customers a maintenance voucher with a period of 12 months from
the beginning of
October. Knowing this maintenance service has a reasonable value of VND
1,200,000. On the year-end income statement, revenue from sales and services is
present in the amount (unit: VND): 99.110,672 (= 98,814,229 + 1,185,770*3/12)
● ALLOCATE: 100,000,000
●101,200,000
250/253 % 98,814,229
1,200,000
3/253 %
100 %
100,000,000
1,185,770

21. Time of reversal of provision for impairment of Inventories: At the end of the
accounting period when preparing the financial statements

22. Revenue should not be recognized until: The risks and rewards of ownership
have transferred from seller to buyer.

23. An asset that is not expected to be converted to cash or consumed within one
year or the operating cycle is: Goodwill.

24. Company X has determined its year-end inventory on a FIFO basis to be

$600,000 at cost.
Information pertaining to that inventory is as follows: Selling price: $620,000;
Disposal
costs: 30,000. What should be presented as this company inventory on the
Statement of Financial position? $590,000 (the min of cost and NRV)

25. Which of the following is NOT part of the Income statement:Prepaid expenses

26. Under VAS, operating cash flows would include: Interest paid.

27. Accrued expenses: Result from services received before payment.

28. Which of the following defines “liabilities”?Present obligation that is expected

to result in an outflow of economic benefits.

29. At the end of the financial year, the company has a bond payable of VND
1,000,000,000 with a term of 5 years. The bonds are paid periodically each year
in equal amounts and the first payment is due at the end of March of the following
year. Information on payable bonds is presented in the statement of financial
position as follows (unit: thousand dong): Short-term liabilities: 200,000 and
Long-term liabilities: 800,000 VND

30. Balance at the beginning of the period: cost of goods A: 100 unit * 100,000
VND, provision has been made for 100 unit * 30,000 VND/ unit. In the period the
enterprise sells 60 unit, unit price is 80,000 VND (0% VAT), at the time of sale,
accountants determine cost and revenue, respectively: 6,000,000; 4,800,000 VND
(provision of inventory not
effect on selling)

31. Schneider Ltd had salaries payable of $60,000 and $90,000 at the end of 2012
and 2013, respectively. During 2013, Schneider recorded $620,000 in salary
expenses in its income statement. Cash outflows for salaries in 2013 were:
$590,000. (=620-(90-60))

32. The enterprise liquidated one production equipment with the original cost of
164,000,000 VND, accumulated depreciation is 153,000,000 VND. Income from
selling this equipment in the form of scrap is collected in cash 2,500,000 VND.
Accountants record this entry as follows (unit: thousand dong): Dr 811: 11,000, Dr
214: 153,000/ Cr 211: 164,000 and Dr 111:2,500/ Cr 711:2,500

33. Office equipment has original cost of 170,000,000 VND, accumulated

depreciation is 34,000,000 VND. So, information about office equipment on the
Financial Statement is presented as follows:
Tangible fixed assets: VND 136,000,000.
- Cost: 170,000,000 VND,
- Accumulated depreciation: (34,000,000 VND)

34. During the year, company K wrote off bad debts of 4,000. Before this entry,
the balance of accounts receivable from customers was 50,000 and the balance of
provision account for bad debts was 4,500.net bad debts after write-off of
receivables is: 45,500. (write off not effect on bad debt expense)

35. In the Statement of Financial Position at the end of its first year of operations,
Company D reported an allowance for uncollectible accounts of $82,000. During
the year, Company D wrote off $32,000 of accounts receivable they had attempted
to collect and failed. Credit sales for the year were $2.200,000, and cash
collections from credit customers totaled $1.950,000. What bad debt expense
would company D report in its first-year Statement of Profit or Loss? $114,000
(82+32)
36. At the end of the year, the accountant determines the amount of bad debts that
need to be made provision to be 30 million dong, knowing the opening balance of
account 2293 is 10 million dong, the following accounts shall be recorded: Dr
642/Cr 2293 20 million dong

37. Telcoba Ltd's trial balance included the following account balances at
December 31, 2019:
Accounts receivable: $10,000: Inventories 40,000; Patent: 12.000; Investments:
30,000;
Prepaid insurance: 6,000; Note receivable, due 2022:50,000. Investments consist
of treasury bills that were purchased in December and mature in next February.
Prepaid insurance is for the next two years. What amount should be included in
the current asset section of Telcoba's December 31, 2019, statement of financial
position? $83,000

38. At the end of June, the company shipped 12,000,000 worth of tools to the
management department with an estimated useful life of 12 months. Recorded
accounting (accounting period calculated according to the calendar year): Dr 242:
12,000,000/ Cr 153: 12,000,000 and at the end of amortization period Dr 642:
6,000,000 / Cr 242: 6,000,000

39. At the end of the month, the accountant gathers the cost of significant repairs.
Fixed assets at the sales department include: materials used: 500,000. Cash spent:
1.100.000 (including 10% VAT). The repair has not been completed, the
accountant records (unit: thousand dong): Dr 2413: 1.500, Dr 133: 100/Cr 152:
500, Cr 111: 1,100
40. How many sub-statements does a typical financial statement have?4 (Financial
position, income statement, notes and cash flow)

41. Who are the main users of the financial accouting information?extenal
(investor, creditor, author, customer,..)

42. Which statement shows how a company uses money? cash flow statement

43. Managers only uses managerial accounting information for running their
businesses -> No (FALSE)

44. Which circular could be applied for all kinds of companies? Cir 200
45. Balance sheet is the another name of: Statement of financial position

46. Which statement shows how a company earns money? Income statement

47. Which documents are applied only for Small and Medium enterprises? Cir 133

48. Financial statements are prepared by: Accounting department

49. Which statements show financial situation of a company: all the financial
statement

50. Which legal documents could be applied for all kinds of companies? ALL (Cir
200, Vas, accounting law)

51. Liquidity refers to: The readliness of asset to be converted to cash

52. Intangible assets usually are reported in the statement of financial position as
current assets: FALSE

53. The ultimate responsibility for the financial statements lies with the auditors:
FALSE

54. Which is the shareholders' equity account in the statement of financial

position? Issued capital

55. Long – term assets include machinery, equipment and inventories: False

56. All current assets are either cash or assets that will be converted into cash or
consumed within twelve months or operating cycle, if that is longer than one year
-> TRUE

57. The statement of financial position reports a company’s financial position at a

point in time-> TRUE

58. Assets do not include: Issued capital

59. Accrued salaries and wages in a statement of financial position represent
salary and wages that have been earned by employees but not yet paid -> TRUE

60. Cash equivalents would include Cash which is not available for current
operations -> FALSE

61. Prepaid expenses are classified as current assets if the services purchased are
expected to expire within twelve months or the operating cycle, if that is longer. -
> TRUE

62. The balance of net receivables represents the amount expected to be collected -
> TRUE

63. The statement of financial position reports: Assets and equities at a point in
time

64. Why do many Income statements distinguish between Revenue and Other
Incomes (Gains)? Help analysts better predict the future cash-flows

65. On the SCF, Cash received from sales of products to customers is reported as:
Cash flows from operating activities

66. There are two methods for reporting operating activities: Indirect and Direct

67. A practice which a company pursuing its distributors to purchase more of its
product than necessary near the end of a reporting period is called:Channel
stuffing

68. What is the purpose of the statement of cashflows? To summarize the cash
inflows and cash outflows in a period

69. On the SCF, Cash received from the capital contribution is reported as: Cash
flows from financing activities

70. Cash flows are classified into 3 sections on the Statement of Cashflows. These
3 sections are: Operating, Investing, Financing activities
71. What is the purpose of the income statement? To summarize the profit-
generating activities occurring in a period

72. What is the purpose of the Statement of Cash flows? Provide relevant
information about the amount of cash and cash equivalents which are received and
paid for a period of time

73. On the SCF, Cash received from sales of long-term assets used in the business
is reported as: Cash flows from investing activities

74. A manufacturing company sells its product (which costs 60 millions VND) to a
customer for 100 millions VND cash. The amount of 100 millions VND is classified
as: REVENUE

75. A manufacturing company sells its product (which costs 60 millions VND) to a
customer for 100 millions VND cash. The amount of 60 millions VND is classified
as: Expenses

76. Matching principle influences revenue the most

77. Revenue is: Economic interests that a company earns during a period

78. In the income statement, revenue is measured by: Unit of currency

79. Which documents affect service revenue in Vietnam: VAS 14

80. Which documents affect revenue in Vietnam: VAS 14, VAS 15, CIR 200

81. Customer loyalty program requires company to: Deferred revenue to a later
period

82. ROA is calculated by: Returns divided by Average balance of assets

83. Unit of turnover is: NUMBER OF TIME

84. Another name of return: profit

85. Why should we use the average of Equity when calculating ROE? In order to
make equity best fit to returns

86. In a good system of internal control, the person who initiates a transaction
should be allowed to effectively control the processing of the transaction through
its final inclusion in the accounting records. -> FALSE

87. Which of the following does not change the balance in accounts receivables?
BAD DEBT EXPENSE, RECOVERY

88. The allowance for uncollectible account is a: Contra asset account

89. A Company should provide for bad debts on an accounts receivable balance
when it is portable that the account receivable balance has been uncollectible

90. The receivables turnover ratio provides a way for an analyst to assess the
effectiveness of a company in managing its investment in receivables -> FALSE

91. From a financial accounting perspective, the main purposes of a system of

internal control are to improve the accuracy and reliability of accounting
information to safeguard assets

92. Cash may not include: Restricted cash

93. Cash equivalents would include Cash which not available for current
operations: FALSE

94. Cash equivalents would include investments in marketable equity securities as

long as management intends to sell the securities in the next three months: FALSE

95. VAS allows an overdraft in a cash account at one bank to be offset against a
positive balance in the account at another bank for purposes of reporting cash on
the company’s Statement of Financial Position: FALSE

96. Account receivable are normally reported at the: net amount to be received

97. Account 152 is used to record: in-stock materials

98. We ___ inventories accounts when receiving trade discounts: credit

99. A set of tools are issued from the warehouse to be used up in 1 accounting
period for administrative operation. Journal entry for this transaction is: DR
642/CR 153

100.
Which cost should be excluded from Inventory? Freight-out (distribution cost)

101.
Inventories includes: Goods used for sales /Partially finished goods waiting for
completion and eventually sale / Materials used in production process

102.
We ___ inventories accounts when returning goods to the supplier: CREDIT

103.
A set of tools are issued from the warehouse to be used in 3 accounting periods for
administrative operation. Journal entry for this transaction is: DR 242/CR 153

104.
Account 151 is used to record: Goods in transit at the end of the month

105.
We ___ inventories accounts when receiving goods: DEBIT

106.
Accounts usedto record cost of manufacturing inventoriesare: 621,622,627,154,155

107.
ABC company ships $10,000 of merchandise to XYZ company on November 28 and
the merchandise arrives at XYZ's warehouse on December 1. Shipping terms state
thatXYZ takes on ownership of the merchandise as soon as they leave ABC's
shipping dock. XYZ should record an inventory on: NOVEMBER 28

108.
ABC ships $10,000 of merchandise to XYZ on November 28 and the merchandise
arrives at XYZ's warehouse on December 1. Shipping term states that ownership
transfer to the buyer as soon as the shipment arrives at the buyer. XYZ should
record an inventory on: DECEMBER 1

109.
ABC ships $10,000 of merchandise to XYZ on November 28 and the merchandise
arrives at XYZ's warehouse on December 1. Shipping term states that ownership
transfer to the buyer as soon as the shipment arrives at the buyer. On November
28, XYZ should record this merchandise as: XYZ should not record until the
shipment arrives

110.
A company should provide for bad debts on an accounts receivable balance when it
is probable that the accounts receivable balance has been uncollectible: FALSE

111.
The balance of net receivables represents the amount expected to be
collected:TRUE

112.
What differentiate the International standards from VAS in accounting method for
property, plant and equipment?
·Under international standards both the cost model and revaluation model are
allowed
·Under international standards, tests for impairment when events or
changes in circumstances indicate that book value may not be recoverable.
·Both are correct.

113.
Any change in depreciation method or depreciation estimation should be applied:
prospectively

114.
How the cash flows of a company is affected by the depreciation of an fixed asset
which is used for administrative purposes? Asset decrease, expense increase.

115.
How the financial status of a company is affected by the depreciation of an fixed
asset which is used for administrative purpose? Asset decrease, expense increase.

116.
Under VN regulation, Account 214 ending balance shows: accumulated
depreciation

117.
Under VAS, which asset should not be depreciated/ amortized? Permanent land
use right.

118.
Which depreciation method is based on activity level of fixed asset? Units – of –
production.

119.
Which time-based depreciation method results in greater amounts in the early
years and less each succeeding year of the asset’s life? Declining balance.

120.
Which depreciation method results in the same amount of depreciation in each
year of the asset’s life? Straight line

121.
Under VAS, which depreciation method is not allowed? Sum of the year digits

122.
Under VAS, the total amount which should be depreciated during useful life of an
asset is: cost less (-)residual value at the end of its useful life

123.
Depreciation, depletion and amortization are cost allocation processes.

124.
Subsequent expenditures should be capitalized in the value of a fixed asset when It
is probable that the expenditures increase the future economic benefit of the asset

125.
Expenditures which are incurred after a fixed asset is recognized in the financial
statement (called “subsequent expenditures”) are always capitalized in the value
of the asset? FALSE.

126.
Donated assets are recorded at: fair value
127.
Tangible fixed assets exclude: patent

128.
The initial cost of property, plant, and equipment includes all the identifiable
expenditures necessary to bring the asset to its desired condition and location for
use. TRUE.

129.
Property, plant, and equipment and intangible assets are long – term, revenue
producing assets TRUE.

130.
Property, plant, and equipment, investment property and intangible assets are:
long term revenue-producing assets.

131.
The fixed- assets turnover ratio provides: the amount of sales generated per dollar
of fixed assets.

132.
When selling fixed assets funded by long-term loans, the remaining value of fixed
assets will be subtracted from the original loans FALSE.

133.
Under VAS, development expenditures are capitalized if certain criteria are met.

134.
On the statement of financial position, section “fixed assets” excludes :
Inventories.

135.
The cost of repairing tangible fixed assets for sale, knowing that these assets were
previously used for business activities, is recorded into the account: 811

136.
Accrued salaries and wages in a statement of financial position represent salary
and wages that have been earned by employees but not yet paid TRUE.
137.
The statement of financial position reports: assets and equities at a point in time

138.
The ultimate responsibility for the financial statements lies with the auditors
FALSE

139.
Assets do not include: investments

140.
Which is a shareholders’ equity account in the statement of financial position?
Issued capital

141.
Intangible assets usually are reported in the statement of financial position as
current assets: FALSE

142.
Long- term assets include machinery, equipment and inventories FALSE

145. The statement of financial position reports a company’s financial position at a

point in time TRUE

144.
All current assets are either cash or assets that will be converted into cash or
consumed within twelve months or the operating cycle, if that is longer than one
year TRUE

145.
Assets do not include: Issued capital

146.
Cash equivalents would include Cash which is not available for current operations:
FALSE

147.
Intangible assets usually are reported in the statement of financial position as
current assetsL TRUE
148.
Which is a shareholders’ equity account in the statement of financial position?
Dividends payable

149.
Assets acquired a lump sum purchased are valued based on: The relative fair value

150.rent collected in advance is an asset: a liability account in the SoFP

151.
In the DuPont formula, return on asset equal: Profit margin on sales x Assets
turnover

152. Cost of inventories equal : plus freight in, less purchase discount

153.
For a typical manufacturing, the most common critical point for recognizing
revenue on the date is: the product is delivered

154.
when receiving the seller’s invoice of rebate of purchase goods in stock, the buyer
record: Dr 331/ Cr 156, Cr 133

155.
The ending balance of account 1381 will be presented in the SoFP in which items:
shortage of assets awaiting resolution

156.
The equity of the business will be reduced when: distributed profit by cash

157.
The enterprise buys used fixed assets, the agreed purchase price is 200 ml, VAT
10% is deducted paid by cash bank. Assume TSCĐ have a useful life of 10 years,
depreciation 10%. The initial cost of this asset is: 200 ml

158.
The item “Long term spare parts equipment” in the SoFP is presented in:
noncurrent assets
159.
The item inventories (code 141) on the SoFP, reflects the value if inventory
according to: original cost

160. if the provision of inventories to be made at the end of accounting period is

larger than the provision for devaluation of inventories recorded at the opening
thí period: Dr 632 /Cr 2294

161. The enterprise buys a fax machine used at the management department with
a value of 30 ml, estimated to be used for 5 years. The machine will be recorded
on: Ac 211

162. VAS 01 can be used in place of specific accounting standards: FALSE

163.
The monthly depreciation of a fixed asset for the selling department is
65,500,000. Thí asset is formed from the owner's equity. Double entry: DR 641/
CR 214

164. “Undistributed profit after tax” reflects the amount of profit or loss after tax
that has not been finalized or not distributed at the reporting time

165. The buyer will record the missing goods for unknown reason when
purchasing goods by the method of receiving goods at the seller;s warehouse to
the account: Acc 138

166. The enterprise receives a fixed asset with a purchase price of 100 ml VND
before tax, 10% VAT (deductible), paid by cash bank. The asset is financed from
long term loans. Accountants record : Dr 211=100, Dr 133=10/Cr 112= 110

167. Basis accounting principles include: accrual basis, going concern, historical
cost, matching, consistency, prudence, materiality

168. After removing a part of the production line, it will reduce the output as well
as the future performance of this line -> reduce initial of fixed asset

169. According vas 14, revenue from service provision is recognized when bla bla
how many conditions are satisfied? 4
170. The buyer will record the missing goods for unknown reason when
purchasing goods by the method of CIF to the account: no recording

171.
Depreciation of fixed assets used for the selling department will affect : Net
operating profit (or loss)

172.Trade discount -> Revenue deductions

173. Revenue on the IS includes : revenue from sales, financial income, revenue
from service provision

174. when classifying financial statements according to the reporting time, they
can classify into: annual, interim, special case

175. NOT part the income statement: Undistributed after tax profit (Retained
earnings)

Note:
➔
➔
➔
➔

● Cách xác định các nguyên tắc:

Liên quan tới revenue, expense: matching
Liên quan tới allowance, provision : Prudence
Liên quan tới at the time of lập giao dịch: accrual
liên quan tới lựa chọn chính sách kế tốn, phương pháp tính và thay đổi chính sách:
nhất quán consistently
Liên quan tới độ quan trọng lớn nhỏ của thông tin: trọng yếu (materiality)
Vd: việc lập dự phòng khoản phải thu: nguyên tắc chính là prudence, ngun tắc phụ
là matching (vì nó có liên quan tới chi phí)
Có 2 loại accounting: financial accounting và management accounting
● FA: internal và external (tập trung chủ yếu vào external)
● MA: internal
Luật pháp VN về kế toán theo thứ tự thấp dần: Law -> Standards -> regime ->
circular
Law: cao nhất, là nền tảng foundation cho standards và regime
Hướng dẫn lập BCTC: Cir.200

Chế độ kế toán dành cho MỌI DN: cir.202

Chế độ kế toán cho DN NHỎ VÀ VỪA: cir.133

7 nguyên tắc: accrual, going concern, cost, matching, consistence, prudence,
materiality ->
using for recording
BCTC bắt buộc phải thỏa mãn các yêu cầu sau:
1.
2.
3.
4.

Faithful
relevance
verifiable, understandable, timeliness
consistency, comparable

VAS income statement:

Revenues

sales deductions

Net revenues

C =A-B

Cost of sales

D
Gross profit

E=C-D

Financial income

Financial expenses

in which, financial H
interest
Selling E

G&A

Net operating profit

K=E+F-G-I-J
(excluded H)

other income

other E

results
activities

of
Accounting
Before tax

other N=L-M
profit O=K+N

CIT

P=O x tax rate (20%)

Net income

=O-P

Income Statement: summarize the profit - generating during period

Cash flow statement: the cash receipts and cash disbursements during period
-> cả hai giúp đánh giá khả năng sinh lời của công ty, liệu cơng ty có đủ tiền để trả
cho mình
khơng
IS có thu nhập từ 2 hoạt động: HĐ thường xun (bán hàng dịch vụ+hđ tài chính,..):
có khả
năng kinh tế future ; Hđ bất thường (lâu lâu xảy ra): economic benefit short time
1.
2.

Dividends : financing activities

Nguyên tắc ghi nhận REVENUE:
Sales for goods, service: VAS 14, Construction: VAS 15

Đối với sales goods: có 5 điều kiện cần thỏa mãn, trong đó chuyển giao quyền sở
hữu
và rủi ro là quan trọng nhất
3. Các trường hợp đặc biệt khi ghi nhận dthu, để ý: quyền sở hữu và rủi ro, các
cơng
việc hồn thành bao nhiêu thì ghi nhận bấy nhiêu, mua hàng khuyến mãi, tặng kèm
hay khách hàng truyền thống
Tài khoản 131: Debit: trade receivable (current assets), credit: prepaid expense
(liability)
Chiết khấu thanh tốn (khi mình trả tiền đc giảm): 635 ; chiết khấu thương mại
(cost
deductions): 521
Internal control:
1.
2.
3.
4.

who handle cash not be involved or have access to record

all expenditures should be approved by authorized
Hạn chế trả tiền = 111, nên sd 112
định kỳ so sánh số dư trên sổ sách và thực tế

Nguyên giá = cost + các chi phí có liên quan tới việc mua hàng hóa - deduction

Kế toán TSCĐ: dùng VAS 03 và 04

Các hoạt động mua bán TSCĐ với mục đích dành cho quỹ phúc lợi (welfare fund)
(khơng dùng vào HĐKD) thì khơng được khấu trừ thuế GTGT mà gộp thuế GTGT
vào nguyên giá.
VN dùng 3 pp khấu hao: straight-line, declining balance, component (không đc
dùng

sum of the year’s digits)

Tiền thuê đất được phân bổ dần vào chi phí kinh doanh 62*, 64* KHƠNG ghi nhận
là TSCĐ vơ hình.
Chi phí phát sinh đem lại lợi ích được ghi nhận là chi phí SXKD trong kỳ hoặc được
phân bổ dần trong thời gian tối đa KHÔNG QUÁ 3 NĂM.

Phát hiện thiếu TSCĐ và được xử lý ngay thì khơng sử dụng acc 1381.
Thuế GTGT khơng tính trên đất.
Inventory: VAS 02
Inventory tính theo original cost nhưng trình bày trên BCTC theo giá thấp hơn
giữa
original cost và NRV.
FIFO: khi giá cả đang tăng thì giá trị HTK cuối kỳ > PP average-cost.

=> the average-cost results in lower income taxes (lower net income) during time
of rising
prices.

inventory error

COGS

net income

understates beginning inv.

understated

overstated

overstates beginning inv.

overstated

understated

understates ending inv.

overstated

understated

overstates ending inv.

understated

overstated

Khấu hao = (cost - giá trị thanh lý)/ useful life