Wrobbel Chapter 20 Accounting Terms

Front 1

Activity-based costing,

Back 1

Allocating factory overhead based on the level of major activities.

Front 2

Factory overhead

Back 2

All expenses other than direct materials and direct labor that apply to making products.

Front 3

FIFO

Back 3

See first-in, first-out inventory costing method.

Front 4

First-in, first out inventory costing method

Back 4

Using the price of merchandise purchased first to calculate the cost of merchandise sold first

Front 5

Gross profit method of estimating inventory

Back 5

Estimating inventory by using the previous year’s percentage of gross profit on operations.

Front 6

Inventory record

Back 6

A form used during a physical inventory to record information about each item of merchandise on hand.

Front 7

Inventory turnover ratio

Back 7

A financial ratio that evaluates the amount of inventory available for sale.

Front 8

Last-in, first-out inventory costing method

Back 8

Using the price of merchandise purchased last to calculate the cost of merchandise sold first.

Front 9

LIFO

Back 9

See last-in, first-out inventory costing method.

Front 10

Lower of cost or market

Back 10

Using the lower of cost or market price to calculate the cost of ending merchandise inventory.

Front 11

Market value

Back 11

The price that must be paid to replace an asset.

Front 12

Number of days' sales in inventory

Back 12

A financial ratio determined by dividing 365 days by the inventory turnover ratio.

Front 13

Stock ledger

Back 13

A file of stock records for all merchandise on hand.

Front 14

Stock record

Back 14

A form used to show the kind of merchandise, quantity received, quantity sold, and balance on hand.

Front 15

Weighted-average inventory costing method

Back 15

Using the average cost of beginning inventory plus merchandise purchased during a fiscal period to calculate the cost of merchandise sold.