Question

What is a controller's cushion?

Answer 1

FIFO and LIFO accounting are methods used in managing inventory and financial matters involving the amount of money a company has to have tied up within inventory of produced goods, raw materials, parts, components, or feed stocks. They are used to manage assumptions of cost sheet related to inventory, stock repurchases (if purchased at different prices), and various other accounting purposes.

Answer 2

Answer:

The controller's cushion refers to the deliberate overstatement of expenses early in the year, so that the controller has a favorable expense buffer that can be drawn down later in the year.