Explore BrainMass

Explore BrainMass

    significance of accounting for inventories

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    1. What is the significance of accounting for inventories? What "difference does it make" if the amounts reported are accurate or not?

    © BrainMass Inc. brainmass.com March 4, 2021, 5:54 pm ad1c9bdddf
    https://brainmass.com/business/purchases-inventory-and-cogs/significance-of-accounting-for-inventories-17613

    Solution Preview

    Hi there,
    <br>
    <br>Accounting for inventory is very important, especially if the business is involved in the selling of physical goods. If the company does not report that they have any inventory on hand when they actually do so, they would be underreporting their assets. This could have significant consequences in instances where the company holds bank covenants and their bank loans are dependent on ...

    Solution Summary

    This question involves the fundamentals of accounting

    $2.19

    ADVERTISEMENT