What is the significance of the Thor Power Tool Co. case?
What will be an ideal response?
In Thor Power Tool Co., the company wrote off the cost of obsolete parts even though these parts were kept on hand and their asking price was not reduced. While this practice adhered to generally accepted accounting principles, the Supreme Court ruled that the practice did not clearly reflect income. Thus, in cases where the best accounting practice conflicts with the clear reflection of income, the standard of clear reflection of income will prevail. Where Regulations do not specify the treatment of an item or when the Regulations provide more than one alternative accounting method, generally accepted accounting principles may be used.
You might also like to view...
Which of the following is true of electronic mediation or e-mediation?
A. The parties and the mediator communicate through email. B. Private conversations between the mediator and the parties are not possible. C. A chat room is assigned for conversations between both parties and the mediator. D. Settlement cannot be reached without paying substantial lawyers' fees and court costs.
Dissimilar year ends will have no impact on the results of ratios
Indicate whether the statement is true or false
Which of the following products is most likely to be priced according to the perceived-value
approach? A) kitchen appliances B) processed foods C) industrial machinery D) luxury watches
Which form of perceived risk most closely resembles class consciousness?
a. social risk b. performance risk c. time risk d. financial risk