temporal method: historical rate for COGS and DA

CFA Level II
#1

Can you give some intuitive explanation for why the historical rate is used for COGS and DA, while the average rate is used for the revenues and SG&A in the temporal method? This is one of the reasons that the accounting is so hard for me to grasp…

#2

I don’t know why so close to the exam you are looking for Intuition. Mug it, and forget it in 20+ days. Now is not the time for intuition, esp. if you are starting on this topic now. there are places where intuition helps, but this is a clear place where you need to make a note card, memorize some items / steps and move on.

#3

you’re right, memorize them and move on. Time to take some sample exams, I saw some had started the practice exams, but I’m still in the Qbanks.

#4

^ I too am on QBank and I think I need to put it to rest. (R.I.P. QBank - 4th May to 10th May) and need to start reading Secret Sauce, Ethics and start hitting the Exam next weekend onwards.