Chapter 6

Question 1

Consigned goods

Answer 1

Goods held for sale by one party although ownership of the goods is retained by another party.

Question 2

Inventory Turn Over

Answer 2

Cost of goods sold / average inventory

Question 3

Days in Inventory

Answer 3

365 days / Inventory TO

Question 4

An inventory costing method that used weighted-average unit cost to allocate the cost of goods available for sale to ending inventory and cost of goods sold.

Answer 4

Average-cost method

Question 5

Inventory systems in which companies manufacture or purchase goods only when needed.

Answer 5

Just-in-time inventory

Question 6

Goods held for sale by one party although they ownership of the goods is retained by another.

Answer 6

Consigned goods

Question 7

An actual physical-flow costing method in which particular items sold and items still in inventory are specifically costed to arrive at cost of goods sold and ending inventory.

Answer 7

Specific Identification Method

Question 8

The cost of purchasing the same goods at the present time from the usual supplies in the usual quantities.

Answer 8

Current Replacement Cost

Question 9

For a company using LIFO, the difference between inventory reported using LIFO and inventory using LIFO

Answer 9

LIFO Reserve

Question 10

Average cost that is weighted by the number of units purchased at each unit cost.

Answer 10

Weighted-average unit cost

Question 11

The journal entry to record a return of merchandise purchased on account under the perpetual inventory system would credit…

Answer 11

Inventory

Question 12

The lower of cost or market basis of valuing inventories is an example of…

Answer 12

Conservatism