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15 Cards in this Set
- Front
- Back
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turn over inventory
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cost of goods sold/average inventory |
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days in inventory |
365/inventory turnover |
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gross profit rate = |
-gross profit/net sales -(sales revenue-cost of goods sold)/sales revenue |
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FIFO |
produces the highest inventory amount |
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LIFO |
produces highest cost of goods sold |
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JIT Inventory |
(just-in-time) an inventory strategy companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production process, thereby reducing inventory costs. |
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FOB Destination |
-free on board destination -means that the buyer takes the delivery of goods being shipped to it by supplier once the goods arrive at the buyer's receiving dock; the seller pays and bears the freight charges and owns the goods while they are in transit |
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purchase inventory |
initially listed as an asset, but later is an expense |
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Howard incorporated is doing inventory. in the inventory process, Howard inadvertently miscategorized a $6,000 shipment of FOB destination goods in transit from a supplier as FOB shipping point. How will this miscategorization impact Howard's total inventory? |
Howard's total inventory will be $6,000 too high |
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In which of the following circumstance would the company's stated total inventory be too high? |
Charlie Corporation lists $12,000 worth of consignment goods as a merchandise inventory |
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The inventory method that results in an ending inventory valued at the most recent cost is |
first-in, first-out, (FIFO) |
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if megacorp complies with the LIFO conformity rule, then it will use LIFO for |
income tax purposes and financial reporting purposes |
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LIFO is used when prices are rising and companies wish to |
minimize income taxes |
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specific identification |
method of inventory valuation is desirable when a company sells a limited of high-unit-cost items |
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how can a company determine when to use the specific identification method of costing |
when the company sells a limited number of high-unit cost items |
