Flashcards
Chapter 18: Key Terms
Cards in this deck (13)
- 1Average InventoryTotal of all inventories divided by number of times inventory taken, 484.
- 2Distribution of OverheadCompanies distribute overhead by floor space or sales volume, 485-486.
- 3First-in, First-out (FIFO) MethodThis method assumes the first inventory brought into the store will be the first sold. Ending inventory is made up of goods most recently purchased, 480, 482,
- 4Gross Profit MethodUsed to estimate value of inventory, 484.
- 5Inventory TurnoverRatio that indicates how quickly inventory turns.
- 6Just-in-time Inventory SystemSystem that eliminates inventories. Supplies provide materials daily as manufacturing company needs them, 485.
- 7Last-in, First-Out (LIFO) MethodThis method assumes the last inventory brought into the store will be the first sold. Ending inventory is made up of the oldest goods purchased, 481-482.
- 8Overhead ExpensesOperating expenses not directly associated wit ha specific department or product, 216, 485.
- 9Periodic Inventory SystemPhysical count of inventory taken at end of a time period. Inventory records are not continually updated, 477.
- 10Perpetual Inventory SystemInventory records are continually updated, opposite of periodic inventory system, 477.
- 11Retail MethodMethod to estimate cost of ending inventory. The cost ratio times ending inventory at retail equals the ending cost of inventory, 483.
- 12Specific Identification MethodThis method calculates the cost of ending inventory by identifying each item remaining to invoice price, 478-479.
- 13Weighted- Average MethodCalculates the cost of ending inventory by applying an average unit cost to items remaining in inventory for that period of time, 479-480, 482.
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- Flashcards on Chapter 18: Key Terms, created by ASHTON VEACH on 27/09/2023.
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