inventory Flashcards

1
Q

Purchases - Net of Discounts, Freight, Warehouse expenditures

A

Inventory

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2
Q

FOB Shipping Point puts the inventory into the hands of the buyer from the loading dock

A

Inventory

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3
Q

FOB Destination keeps the items in the seller’s inventory until it reaches the buyer

A

Inventory

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4
Q

Sales Commissions

Interest on liabilities to vendors

Shipping expense to customers

A

Inventory

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5
Q

Under the gross method, discounts are recorded only when used.

A

Inventory

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6
Q

Under the net method, discounts are recorded whether used or not.

Unused discounts are allocated to financing expense.

A

Inventory

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7
Q

Gross Margin : Sales - COGS (BI + P - EI)

A

Inventory

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8
Q

Inventory is counted at certain times throughout the period

Weighted-average cost flow method is used.

A

Inventory

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9
Q

Inventory count continually updated

Uses a moving-average cost flow method

A

Inventory

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10
Q

Under the FIFO system, periodic and perpetual inventory methods will both have the same ending inventory.

A

Inventory

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11
Q

COGS / Average Inventory

A

Inventory

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12
Q

365 / Inventory Turnover

A

Inventory

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13
Q

The CONSIGNOR holds the consigned items in their inventory count. The cost includes the shipping to the consignee.

A

Inventory

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14
Q

No. Consignment goods are maintained in the inventory of the consignor, not the consignee.

A

Inventory

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15
Q

Misstatement of beginning inventory does NOT have an effect on ending retained earnings.

Misstatement of ENDING inventory does have an effect on retained earnings.

A

Inventory

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16
Q

EI Over : COGS Under : ERE Over

EI Under : COGS Over : ERE Under

A

Inventory

17
Q

The first (oldest) inventory you have in stock is the first inventory you record for COGS purposes. If your oldest inventory on the shelf cost you $1 when you bought it, COGS is $1

This is just for inventory pricing. It has nothing to do with physically selling the oldest item on the shelf - It is purely for accounting purposes

A

Inventory

18
Q

The last (newest) inventory you have in stock is the first inventory you record for COGS purposes. If your newest inventory on the shelf cost you $1.50 when you bought it, COGS is $1.50

A

Inventory

19
Q

COGAS / Total Units : Weighted Average Cost Per Unit

A

Inventory

20
Q

FIFO’s relationship to COGS will be opposite LIFO’s relationship to COGS in periods of falling/rising prices.

A

Inventory

21
Q

FIFO has the Lowest COGS

FIFO is a cat that sees a mouse starts Low and is Rising

If COGS is Low, that means EI is High

A

Inventory

22
Q

FIFO has the Highest COGS

Remember: FIFO, that silly cat, got High from Catnip and is Falling off the couch

If COGS is High, that means EI is Low

A

Inventory

23
Q

Market Ceiling : Net Realizable Value : Selling Price - Selling Costs

Market : Replacement Cost

Market Floor : Net Realizable Value - Normal Profit

A

Inventory