Flashcards
Chapter 18
Cards in this deck (15)
- 1Average InventoryTotal of all inventories divided by number of time inventory taken.
- 2Distribution of OverheadCompanies distribute overhead by floor space or sales volume.
- 3First-In, First-Out (FIFO) MethodThis method assumes that first inventory brought into the store will be the first sold. Ending inventory is made up of goods most recently purchased.
- 4GAAPAccounting rules or standards set by a policy board to establish commonly accepted reporting of accounting information.
- 5Gross Profit MethodUsed to estimate value of inventory.
- 6IFRSAccounting rules or standars used internationally to establish commonly accepted reporting of account information.
- 7Inventory TurnoverRatio that indicates how quickly inventory turns: Cost of goods sold / Average inventory at cost.
- 8Just-In-Time (JIT) Inventory SystemSystem that eliminates inventories. Suppliers provide materials daily as manufacturing company needs them.
- 9Last in, First-Out (LIFO) MethodThis method assumes the last inventory brought into the store will be the first sold. Ending inventory is made of the oldest goods purchased.
- 10Overhead ExpensesOperating expenses not directly associated with a specific department or product.
- 11Periodic Inventory SystemPhysical count of inventory taken at the end of a time period. Inventory records are not continually updated.
- 12Perpetual Inventory SystemInventory records are continually updated; opposite of periodic inventory system.
- 13Retail MethodMethod to estimate cost of ending inventory. The cost ratio times ending inventory at retail equals the ending cost of inventory.
- 14Specific Identification MethodThis method calculates the cost of ending inventory by identifying each item remaining to invoice price.
- 15Weighted-Average MethodCalculates the cost of ending inventory by applying an average unit cost to items remaining in inventory for that period of time.
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- Average Inventory, Distribution of Overhead
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- SAM HARRIS
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