Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
16 Cards in this Set
- Front
- Back
|
Average Cost Method
|
A method of valuing all units in inventory at the same average per unit cost, which is recomputed after each purchase.
|
|
|
Consistency (inventory valuation)
|
An accounting principle that calls for the use of the same method of inventory pricing from year to year
|
|
|
Cost Flow Assumption
|
Assumption as to the sequence in which units are removed from the inventory for the purpose of sale.
|
|
|
Cost Layer
|
Units of merchandise acquired at the same unit cost.
|
|
|
Cost Ratio
|
The cost of merchandise expressed as a percentage of its retailing selling price.
|
|
|
First-in, First-out (FIFO) Method
|
A method of computing the cost of inventory and the cost of good sold based on the assumption that the first merchandise acquired is the first merchandise sold and that the ending inventory consists of the most recently acquired goods.
|
|
|
F.O.B. Destination
|
A term meaning the seller bears the cost of shipping goods to the buyer's location. Title to the goods remains with the seller while the goods are in transit.
|
|
|
F.O.B. Shipping Point
|
The buyer of goods bears the cost of transportation from the sellers location to the buyers location. Title to the goods passes at the point of shipment, and the good are the property of the buyer while in transit
|
|
|
Gross Profit Method
|
A method of estimating the cost of ending inventory based on the assumption that the rate of gross profit remains apx. the same year to year.
|
|
|
Inventory Turnover
|
COGS divided by the average amount of inventory. Indicates how many times the avg. inventory is sold during the course of the year.
|
|
|
Just-In-Time (JIY) Inventory System
|
Means receiving purchases or raw materials just in time for use in the manufacturing process and completing the manufacture of finished goods just in time to fill sales orders.
|
|
|
Last-in, First-out (LIFO) method
|
A method of computing the cost of goods sold by use of the prices paid for the most recently acquired inventory
|
|
|
Lower-of-cost-or-market (LCM) rule
|
A method of inventory pricing in which goods are valued at original cost or replacement cost (whichever is lower).
|
|
|
Moving Average Method
|
A method of valuing all units of inventory at the same average per unit cost, recalculating this cost after each purchase. This method is used in a perpetual inventory system.
|
|
|
Retail Method
|
A method of estimating the cost of goods sold and ending inventory. The cost ratio is based on current cost-to-retail price relationships rather than those of the prior year.
|
|
|
Specific Identification
|
Recording as the cost of goods sold the actual costs of the specific units sold. Necessary if each unit in inventory is unique.
|
