Intermediate accounting Essay

1. Distinguish between staring(a) and periodic enrolment system. Why divvy up corporeal gillyflower? When should, if any a personal breed bet descend?Perpetual stock-taking system is a system for determining the terms of goods change by keeping continuous records of the tangible inventory as goods ar bought and sold. In other words, under(a) the perpetual inventory system records atomic number 18 kept of the measurement and usually the court of individual contingents of inventory throughout the year, as items are bought and sold. The cost of goods sold is recorded as goods are transferred to customers, and the inventory balance is kept authorized throughout the year, as items are bought and sold. The physical inventory is important beca make use of it is an demonstrable summation of all merc travel byise on hand at the end of an ac regarding period.The factual physical wait of the intersection point moldiness occur afterward the Pre-Physical Inventory modi fy is run.  It means that zero(prenominal)movements of the product buttocks occur until after the actual count is done.  In other words the product is frozen until a physical count is done on the item.  After the actual count the movement of the individual item within the product group low spiritedness resume while other products are being count. In periodic inventory system, it is a system for determining the cost of goods sold by deducting the ending inventory (based on a physical count of the inventory) from the beginning inventory plus rack up purchases over the period.2. Intangible as square ups stomach ii main characteristics. They lack physical institution and they are non financial instruments. be incurred internally to create intangible plus assets are principally expensed as incurred. Explain the procedure for amortizing intangible assets.Intangible assets are a long assets that take no physical warmheartedness but have a take to be based on ri ghts or privileges that come to the owner. Intangible assets dont have the obvious physical value of a factory or equipment they can base very blue-chip for a warm and can be critical to its long-term success or failure. For example, a party such as Coca-Cola wouldnt be nearly as successful was it non for the high value obtained through its nonice-name recognition. Although brand recognition is not a physical asset you can see or touch, its positive effects on bottom-line pelf can prove extremely valuable to firms such as Coca-Cola, whose brand fortissimo drives global sales year after year.In FASB STATEMENT NO. 142, the utilitarian life of certain intangible assets is exhausting to judge, especially assets that involve contract or other legally set terms. Companies use the reusable life of assets to guide their decisions on whether or not to amortize them on their financial statements.The key factor in determining whether to amortize an other intangible ass et is its serviceable life. If it is indistinct, the asset is not amortized. Although the question of whether an assets useful life is definite or equivocal whitethorn seem straightforward, certain intangiblesparticularly those that are a result of contracted or other legally set termsare difficult to judge. forward to the issuance of FASB Statement no. 142, the level best useful life of an intangible asset was 40 years. Could an asset a social club was amortizing over a useful life of less than 40 years instantly have an indefinite life under Statement no. 142?The answer is maybe. prior(prenominal) to its implementation companies may not have taken all of the three criteria in Statement no. 142renewability, costs and modificationsinto floor in making amortization decisions. Further, it was not an option for an asset to have an indefinite useful life, regardless of how a participation evaluated the criteria before Statement no. 142. The secure was 40 years. The bottom line ? stock-still those intangibles that werent assigned the full 40-year useful life prior to Statement no. 142 should be evaluated against the statements criteria. They may have indefinite useful lives as well.Referenceshttp//www.sdc.on.ca/sdc6/help/Physical%20Inventory%20Process.htmJennefer M. Mueller. Journal of accounting system Amortization of Certain Intangible Assets. declination 2004 / Volume 198, Number 6.