Which of the following statements about IFRS for inventory accounting is not true?
a. IFRS provide more limited guidance than GAAP for inventory accounting.
b. IFRS allows reversals of write-downs up to the amount of the previous write-down.
c. IFRS prohibits the use of LIFO.
d. IFRS defines market value as replacement cost subject to the constraints of a ceiling and floor.
Answer: d. IFRS defines market value as replacement cost subject to the constraints of a ceiling and floor.
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The degree of operating leverage for Williams Company is 2. The actual operating income is $14,000. If the company expects a 25% increase in sales, operating income should increase by $3,500
Indicate whether the statement is true or false
A critical factor in budgeting for a service firm is to
a. hire professional staff to perform the budgeting work. b. coordinate professional staff needs with anticipated services. c. classify all personnel as either variable or fixed. d. budget expenditures before anticipated receipts.