The main advantage of the weighted average method is its simplicity in calculating the cost of goods sold and ending inventory.

The main disadvantages of using LIFO include lower net income, higher ending inventory values, and increased complexity in record-keeping.

Accounting ratios are used to analyze financial performance and assess the financial health of a business.

The normal balance of an expense account is a debit, which increases the expense when recorded.

IFRS 3 is the primary accounting standard that deals with business combinations, including amalgamation.

AS 26 (Accounting for Intangible Assets) is relevant for partnerships, especially regarding goodwill.

IFRS 3 (International Financial Reporting Standard 3) governs business combinations, including amalgamation, and outlines how to account for such transactions.

GAAP (Generally Accepted Accounting Principles) is the primary accounting standard that governs partnership accounting.

GAAP (Generally Accepted Accounting Principles) is the primary accounting standard in the U.S.

The declining balance method allows for higher depreciation expenses in the early years, providing tax benefits.

The primary advantage of using FIFO during periods of inflation is that it results in higher net income due to lower cost of goods sold.

FIFO (First-In, First-Out) assumes that the oldest inventory items are sold first, which often reflects the current market value of inventory more accurately.

The primary advantage of using LIFO is that it can result in lower tax liability during periods of inflation.

The sum-of-the-years'-digits method matches expenses with revenues more accurately by allocating more depreciation in the earlier years.

FIFO stands for First In, First Out, meaning the oldest inventory items are sold first.

The Declining Balance Method uses a fixed percentage of the asset's book value, resulting in higher depreciation expenses in the earlier years.

The Declining Balance Method results in higher depreciation expenses in the earlier years, which decreases over time.

FIFO (First-In, First-Out) and LIFO (Last-In, First-Out) differ in their cost flow assumptions for inventory valuation.

The declining balance method can lead to a book value lower than the residual value if not properly managed.

The primary disadvantage of the Declining Balance Method is its complexity compared to simpler methods like Straight-Line.

The primary disadvantages of LIFO include lower net income, higher taxes, and complexity in record-keeping.

The primary disadvantage of FIFO is that it can lead to higher taxes during inflation due to lower cost of goods sold.

LIFO is not allowed under IFRS, which can be a significant disadvantage for companies operating internationally.

Using FIFO during rising prices results in higher net income because older, cheaper costs are matched against current revenues.

Using FIFO during inflationary periods typically results in higher net income due to lower cost of goods sold.

The primary financial statement that shows the profitability of a sole trader is the Income Statement.

Accounting standards are designed to ensure consistency, comparability, and transparency in financial reporting across different entities.

Financial accounting primarily focuses on providing information to external users for reporting purposes.

IAS 2 deals specifically with the accounting treatment for inventories, including their valuation and cost flow assumptions.

The accrual basis of accounting focuses on recognizing revenue when earned and expenses when incurred, regardless of cash flow.