ch 6 terms

Question 1

perpetual inventory quantity check

Answer 1

check accuracy
losses from theft or shrinkage

Question 2

periodical inventory quantity check

Answer 2

determine period COGS
debit purchases instead of inventory during period

Question 3

periodical inventory check JE

Answer 3

Purchases (during period. inventory at end)
cash/AP

Question 4

define consignor

Answer 4

i give goods to store to sell, they charge me selling fee

Question 5

define consignee

Answer 5

hold onto good to sell, charge them a selling fee

Question 6

three inventory cost formulas

Answer 6

specific ID, FIFO, weighted average

Question 7

Specific ID formula

Answer 7

keep track of unique specific goods sold to calculate exact cogs of that good (art)

Question 8

FIFO cost formula

Answer 8

first in, first out
mostly food
keep tracks of costs of good purchased on oldest date

Question 9

weighted average cost formula

Answer 9

when inventory can’t be told apart (oil). avg cost of inventory purchased and update every time new purchase made

Question 10

valuing inventory

Answer 10

when fair value < cost, record fair value

Question 11

what does LCNRV stand for

Answer 11

Lower of Cost and Net Realizable Value rule
record smaller of either fair value or cost