Chapter 6 Flashcards
Perpetual end of accting period inventory count
Check accuracy of records
Determine amount oc invemtory lost due to wasted raw materials shoplifitng or employee theft
Consigned goods
Goods held for sale by one company although ownership of goods is held with another company
Cost of goods sold
Beginning inventory + purchases - ending inventory
Cost of goods available for sale
Beginning inventory+cost of goods purchased
Cost of goods purchased
Purchases - purchase r/a - purchase discounts + freight in
Cogs in periodic
Beginning inventory + cost of goods purchased= cost of goods available for sale - ending inventory
Purchases of inventory
Ending inventory - beginning inventory + cogs
Cash paid to suppliers
Cogs +increase in inventory+ increase in accounts payable
Weighted average unit cost
Cost of goods available for sale/total units available for sale
In periods of inflation (prices are rising)______produces higher net income and _______ produces lower net income
FIFO; LIFO
LIFO conformity rule
If LIFO is used dod tax advantages it must also be used for financial reporting prices
Income tax expense is the lowest with_______ cost flow method
LIFO
Lower-of-cost-or-market
A basis whereby inventory is stated at the lower of either its cost or its market value as determined by current replacement or cost
Inventory turnover
Indicates liquidity of inventory
=cogs/average inventory
Average inventory
= cost of ending + cost of beginning/2
