Inventory is valued at the lower of cost or market value according to accounting principles.

FIFO (First In, First Out) values inventory based on the oldest purchases, assuming that the oldest items are sold first.

Net profit is calculated as Total Revenue - Total Expenses.

Straight-line depreciation is calculated by dividing the cost of the asset by its useful life: $10,000 / 5 years = $2,000 per year.

Straight-line depreciation is calculated by taking the cost of the asset minus its salvage value and dividing it by its useful life.

Closing capital is calculated as Opening Capital plus Net Profit minus Drawings.

Under the FIFO (First In, First Out) method, closing inventory is valued based on the most recent inventory costs.

The current ratio is calculated by dividing current assets by current liabilities.

The double declining balance method calculates depreciation by taking the asset's cost, multiplying it by 2, and then dividing by the useful life.

The net profit is distributed according to the terms specified in the partnership agreement.

Profits or losses are usually distributed based on the capital contribution ratio unless otherwise agreed.

In the absence of a partnership agreement, profits are shared equally among partners.

The profit-sharing ratio is determined based on the partnership agreement, which outlines how profits and losses are to be shared.

The profit-sharing ratio is typically negotiated among partners, considering their contributions and agreements.

The straight-line method of depreciation is calculated as (Cost - Salvage Value) / Useful Life.

A trial balance should be prepared as needed, typically at the end of an accounting period or when discrepancies are suspected.

Goodwill is treated as an intangible asset in the accounts of a partnership.

Companies must disclose the reason for the change, the new method, and the financial impact to ensure transparency.

Under FIFO, the cost of goods sold for the first 150 units sold is (100 * $20) + (50 * $25) = $2,000 + $1,250 = $3,250.

Using LIFO, the last 100 units sold are at $15 each and the next 50 units are at $10 each, resulting in a cost of goods sold of (100 * $15) + (50 * $10) = $1,750.

Under FIFO, the first 75 units sold would be from the first purchase, totaling $1,000 (100 units at $10) + $125 (25 units at $15).

A debt to equity ratio of 1.5 indicates that the company has more debt than equity.

Gross profit is calculated as Sales Revenue - Cost of Goods Sold, which is $10,000 - $2,000 = $8,000.

Discrepancy = Total Debits - Total Credits = $150,000 - $145,000 = $5,000.

A trial balance showing total debits of $50,000 and total credits of $48,000 indicates that there is an error in the accounts, as they should be equal.

The first step to identify the error in a trial balance that does not balance is to recalculate the totals to ensure that the addition was done correctly.

The discrepancy is $2,000, indicating that there is a credit error since total debits exceed total credits.

Discrepancy = Total Debits - Total Credits = $15,000 - $12,000 = $3,000.

If total debits do not equal total credits, it indicates that there is an error in the accounts that needs to be investigated.

If total debits equal total credits, it can be concluded that the accounts are balanced.