Accounting For Business Assignment Report

Assume you are opening a furniture store. You have some decisions about how to do the ac-
counting for the business.
Which type of inventory system will you use? Explain your reasons. specific, LIFO, FIFO, or
weighted average? perpetual or periodic?
In any inventory system the best method is to utilize the LIFO(Last In First Out). Since this in-
ventory system witnesses lower profits and inventory values. FIFO strategy regularly shows
higher profits and inventory esteems. LIFO is favoured when the economy is in a time of infla-
tion, because it brings down the measure of taxes the organization must compensate for. Since
the company is in the beginning stage of business LIFO is more suitable. (Morse & Richardson,
2016)
How often do you plan to do a physical count of inventory on hand? Explain your reason.
For the most part, we need to check inventory and Fixed Assets. We need to tally inventory ev-
ery day, other fixed assets on a week after week premise, this period can't. We can consider per
our accommodation, however, it ought to be in an immaculate way.
Inventory costs are rising. Which inventory costing method would have the effect of
maximizing net income? minimizing the amount of income tax?
Effect of maximizing net income
The stock should be evaluated as per market price or cost price whichever is higher, If the market
price and the cost prices are almost the same, we should consider the market price because it is
the real and will take care of the inflation as well. Net income is revenue less expenses. To maxi-
mize income, the method needs to increase the revenue and decrease the expenses. Inventory
costing is an expense that should be minimized. When inventory costs are rising, the newer cost
of inventory is higher than the older east Therefore, the FIFO method should The FIFO m.hod