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### 15 Cards in this Set

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 Average Cost Method: An inventory costing method that uses the weighted average unit cost to allocate the cost of goods available for sale to ending inventory and cost of goods sold. Consigned Goods: Goods held for sale by one party (the consignee) although ownership of the goods is retained by another party (the consignor.) Current Replacement Cost: The current cost to replace an inventory item. Days in Inventory: Measure of the average number of days inventory is held; calculated as 365 divided by inventory turnover ratio. Finished Goods Inventory: Manufactured items that are completed and ready for sale. First-in, First-out (FIFO) method: Freight terms indicating that the goods are placed free on board (FOB) at eh buyer's place of business, and the seller pays the freight cost; goods belong to the seller while in transit. FOB Shipping Point: Freight terms indicating that the goods are placed free on board (FOB) the carrier by the seller, and the buyer pays the freight cost; goods belong to the buyer while in transit. Inventory Turnover Ratio: A ratio that measures the number of times on average the inventory sold during the period; computed by dividing cost of goods sold by the average inventory during the period. Last-in, First-out (LIFO) method: An inventory costing method that assumes that the costs of the latest units purchased are the first to be allocated to cost of goods sold. LIFO reserve: For a company using LIFO, the difference between inventory reported using LIFO and inventory using FIFO. Lower of cost or market (LCM) basis: (inventories) A basis whereby inventory is stated at the lower of cost or market (current replacement cost.) Raw Materials: Basic goods that will be used in production but have not yet been placed in production. Specific identification method: An actual physical flow costing method in which items still in inventory are specifically costed to arrive at the total cost of ending inventory. Weighted Average Unit Cost: Average cost that is weighted by the number of units purchased at each unit cost. Work In Process: That portion of manufactured inventory that has begun the production process but is not yet complete.