Accounting Flashcards
Accounting
Divide total costs of units available for sale by total number of units available for sale.
Weighted average method
Cost to replace inventory
Market
Dollar amount calculated using one of the four inventory costing methods
Cost
If the value of inventory declines while it is being held, the loss should be recognized in the period of decline
Conservatism
Difference between cost and market value is considered a
Loss due to holding inventory
Loss due to holding inventory is recorded on what account
Loss on write-down of inventory
Net sales minus cost of goods sold
Gross profit
Normal gross profit is used to estimate the cost of goods sold and ending inventory
Gross profit method
Keeping records of both cost and selling prices of all goods purchased
Retail method
Length of time generally required for a business to buy inventory, sell it, and collect the cash
Operating cycle
Speed with which the company can convert the asset to cash
Liquidity
Difference between costs of property and accumulated depreciation
Undepreciated cost or book value
Current assets minus Current liabilities
Working capital
Current assets divided by current liabilities
Current ratio
Quick assets divided by current liabilities
Quick ratio
