* Discuss whether or not you believe that LIFO is a fair inventory valuation met
ID: 2351317 • Letter: #
Question
* Discuss whether or not you believe that LIFO is a fair inventory valuation method.* Looking to your neighborhood and businesses that you frequent, identify three different businesses and then state whether they would benefit most from the FIFO, LIFO or Weighted Average approach to accounting for their inventories. State a reason with your answer.
* Discuss what procedures a company may take to reduce the chance of fraudulent employee activities.
* If you became aware of fraudulent accounting activities in the company where you are employed, discuss what you would do about it, if anything, and state why.
Explanation / Answer
* Discuss whether or not you believe that LIFO is a fair inventory valuation method.
It is a fair inventory method - LAST IN, FIRST OUT, or recording first-produced products as sold first. This is fair; it reduces the income taxes companies pay in times on inflation, allowing firms to pay employees - all of us - higher salaries. LIFO is also more accurate than FIFO and has been used by most (approx. 70%) businesses since 1970.
* Looking to your neighborhood and businesses that you frequent, identify three different businesses and then state whether they would benefit most from the FIFO, LIFO or Weighted Average approach to accounting for their inventories. State a reason with your answer.
McDonalds: McDonalds would benefit from LIFO on the large scale, though FIFO may be easier for each individual franchise.
Forever 21: Forever 21 would benefit from LIFO, which would more accurately account for the chain's super-large inventories.
Target: LIFO would reduce income taxes in times of inflation and is more accurate to handle Target's large inventory counting.
* Discuss what procedures a company may take to reduce the chance of fraudulent employee activities.
A company should hire regulators and ensure that all hired employees understand these regulations. A strong, forceful, and well-acquainted regulation department (including a slew of lawyers well-versed in current laws) could also benefit the business.
* If you became aware of fraudulent accounting activities in the company where you are employed, discuss what you would do about it, if anything, and state why.
I would report this fraudulent behavior to an authoritative institution. Depending on the severity of the fraud, I would report to either BBB or go directly to the local police.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.