【正文】 daverage cost 。 firstin, firstout (FIFO) cost 。 and lastin, firstout (LIFO) cost. Only businesses that sell unique items, such as automobiles and jewels, use the specific identification method. Most other panies use the other methods. FIFO reports ending inventory at the most current cost. LIFO reports cost of goods sold at the most current cost.3 Distinguish between the ine effects and the tax effects of the inventory costing methods. When inventory costs increase, LIFO produces the highest cost of goods sold and the lowest ine, thus minimizing ine taxes. FIFO results in the highest ine. The weightedaverage cost method avoids the extremes of FIFO and LIFO.4 Convert a pany39。s net ine from the LIFO basis to the FIFO basis. Companies that use LIFO also disclose FIFO inventory amounts that can be used to convert the pany39。s ine to the FIFO basis. LIFO liquidation creates a problem because it increases ine taxes.5 Prepare a perpetual inventory record. Some panies bine elements of the perpetual and periodic inventory systems at FIFO cost.Some panies keep perpetual inventory records at weightedaverage cost, but few keep such records at LIFO cost.6 Apply to inventory the lowerofcostormarket rule. The consistency principle demands that a business stick with the inventory method it chooses. If a change in inventory method is warranted, the pany must report the effect of the change on ine. The lowerofcostormarket rulean example of accounting conservatismrequires that businesses report inventory on the balance sheet at the lower of its cost or current replacement value.7 Compute the effects of inventory errors on the cost of goods sold and on net ine. Although inventory overstatements may be counterbalanced by inventory understatements in an adjacent period, effective decision making is aided by accurate inventory information.8 Estimate inventory by the gross margin method. The gross margin method is a technique for estimating the cost of inventory. It es in handy for preparing interim financial statements and for estimating the cost of inventory destroyed by fire or other casualties. New Wordsperpetual inventory system n. 永續(xù)盤存制periodical inventory system n. 定期盤存制merchandiser n. 交易者,買賣者ine statement n. 收益表,利潤表tag feature vt. 是...的特色,以...為特色running inventory n. 永續(xù)盤存replacement n. 取代count n. 計(jì)算specific adj. 具體的,明確的weighted average cost n. 加權(quán)平均的成本FIFO(firstin, first out) n. 先進(jìn)先出法LIFO(lastin, first out) n. 后進(jìn)先出法unique adj. 唯一的,獨(dú)一無二的automobile ,機(jī)動(dòng)車identification ,鑒定distinguish vt. 區(qū)別ending inventory ine effects ,收益的影響tax effect n. 稅金,稅金影響效果minimize vt. 最小化extreme ,極度convert vt. 使轉(zhuǎn)變,使變換liquidation ,清算,了結(jié)lowerofcostor market 成本與市場(chǎng)價(jià)孰低consistency ,連貫性stick with 支持,堅(jiān)持warrant ,擔(dān)保conservatism ,保守主義,謹(jǐn)慎性overstatement n. 估值過高,夸大understatement n. 少報(bào)counterbalance vt. 平衡,自動(dòng)抵消estimate vt. accurate adj. 準(zhǔn)確的,精確的gross margin ,銷貨毛利technique n. 技術(shù),技巧e in handy 派得上用處interim ,臨時(shí)的,中期的destroy vt. 破壞,摧毀casualty n.(復(fù)數(shù))傷亡Text 10 Plant Assets, Intangible Assets, and Related Expenses1 Identify the elements of a plant asset39。s cost. Plant assets are longlived assets that the business uses in its operation. These assets are not held for sale as inventory.2 Explain the concept of depreciation. The process of allocating a plant asset39。s cost to expense over the period the asset is used is called depreciation. The cost of all plant assets but land is expensed through depreciation. 3 Account for depreciation by four methods. Businesses may pute the depreciation of plant assets by four methods: straightline, unitsofproduction, and the accelerated methods: doubledecliningbalance and sumofyears 39。digits. To measure depreciation, the accountant subtracts the asset39。s estimated residual value from its cost and divides that amount by the asset39。s estimated useful life. Most panies use the straightline method for financial reporting purposes.4 Identify the best depreciation method for ine tax purposes. Almost all panies use an accelerated method for ine tax purposes. Accelerated depreciation results in greater tax deductions early in the asset39。s life. These deductions decrease ine tax payments and conserve cash that the pany can use in its business.5 Account for disposal of plant assets. Before disposing of a plant asset,the business updates the asset39。s depreciation. Disposal is recorded by removing the book balances from both the asset account and its related accumulated depreciation account. Disposal often results in recognition of a gain or a loss.6 Account for natural resource assets and depletion. The cost of natural resources, a special category of longlived assets, is expensed through depletion. Depletion. Depletion of natural resources is puted on a unitsofproduction basis.7 Account for intangible assets and amortization. Longlived assets called intangibles are rights that have no physical form. The cost of intangibles is expensed through amortization. Amortization of intangibles is puted on a straightline basis over a maximum of 40 years. However, the useful lives of most intangibles are shorter than their legal lives. Depreciation, depletion, and amortization are identical in Distinguish capital expenditures from revenue expenditures. Capital expenditures increase the capacity or the efficiency of an asset or extend its useful life. Accordingly, they are debited to an asset account. Revenue expenditures merely maintain the asset39。s usefulness and are debited to an expense account.New Wordsidentify ,鑒定longlived adj. 長期的inventory ,盤存。財(cái)產(chǎn)目錄depreciation ,貶值straightline n. 直線法unit of production n. 單位產(chǎn)量accelerated(depreciation) method n. 加速折舊法doubledecliningbalance n. 加倍金額遞減法sumoftheyears39。 digits subtract vt. 減去residual value n. 剩余價(jià)值,殘值useful life n. 可用年限,有用壽命financial ,金融的tax deduction ,課稅扣除conserve ,保存dispos