CH7 - Inventories Flashcards Preview

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Flashcards in CH7 - Inventories Deck (16):
1

Merchandise that is shipped by manufacturers to retailers who act as the manufacturer's selling agent.

consigned inventory

2

The name for the retailer in a consigned inventory arrangement.

consignee

3

The name for the manufacturer in a consigned inventory arrangement.

consignor

4

The method of inventory costing based on the assumption that the costs of merchandise sold should be charged against revenue in the order in which the costs were incurred.

first-in, first-out (FIFO) inventory cost flow method

5

A method of estimating inventory cost that is based on the relationship of gross profit to sales.

gross profit method

6

The relationship between the volume of goods sold and inventory, computed by dividing the cost of goods sold by the average inventory.

inventory turnover

7

A method of inventory costing based on the assumption that the most recent merchandise inventory costs should be charged against revenue.

last-in, first-out (LIFO) inventory cost flow method

8

A method of valuing inventory that reports the inventory at the lower of its cost or current market value (replacement cost).

lower-of-cost-or-market (LCM) method

9

The estimated selling price of an item of inventory less any direct costs of disposal, such as sales commissions.

net realizable value

10

The relationship between the volume of sales and inventory, computed by dividing the inventory at the end of the year by the average daily cost of goods sold.

number of days' sales in inventory

11

The purchase order authorizes the purchase of the inventory from an approved vendor.

purchase order

12

The form or electronic transmission used by the receiving personnel to indicate that materials have been received and inspected.

receiving report

13

A method of estimating inventory cost that is based on the relationship of gross profit to sales.

retail inventory method

14

Inventory method in which the unit sold is identified with a specific purchase.

specific identification inventory cost flow method

15

The subsidiary ledger containing individual accounts for items of inventory.

subsidiary inventory ledger

16

A method of inventory costing in which the cost of the units sold and in ending inventory is a weighted average of the purchase costs.

weighted average inventory cost flow method