I am a newbie for the cpa exam and also this forum..

I have 2 questions to solve and it would be very appreciated if anyone give me a hope and help!!!! T,T

1. Reporting inventory at the lower of cost or market is a departure from the accounting principl of

a. historical cost

b. consistency

c. consevatism

d. full disclosure.

I chose C... but the answer is A! Why??? T,T

2. 25(PVIFA r,20)+1000(PVIF r,20)=925.6

In here, how do you calculate R??(the interest I assume)

If I had this question in the real CPA exam, do I must use Excel to caluclate? If it is so, what is the formula?? T.T I am desperate....

For the first question....

The question is about the departure from the accounting principle. In the case of lower of cost or market, it is a departure in that for the sake of conservativism, we choose either the historical cost or the market replacement cost.

Don't know what you mean by the second question.