Reversed Chapter (6) Flashcards
Merchandise that is shipped by manufacturers to retailers who act as the manufacturer’s selling agent.
consigned inventory
The name for the retailer in a consigned inventory arrangement.
account form
The name for the manufacturer in a consigned inventory arrangement.
consignor
The method of inventory costing based on the assumption that the costs of merchandise sold should be charged against revenue in the order in which the costs were incurred.
first-in; first-out (FIFO)
A company’s ability to manage its inventory effectively.
inventory cost flow method
A method of estimating inventory cost that is based on the relationship of gross profit to sales.
gross profit method
The relationship between the volume of goods sold and inventory; computed by dividing the cost of goods sold by the average inventory.
inventory turnover
A method of inventory costing based on the assumption that the most recent merchandise inventory costs should be charged against revenue.
last-in; first-out (LIFO) inventory
A concept of accounting that determines the amount initially entered into the accounting records for purchases.
cost flow method
method A method of valuing inventory that reports the inventory at the lower of its cost or current market value (replacement cost).
lower-of-cost-or-market (LCM) method (285)
The estimated selling price of an item of inventory less any direct costs of disposal; such as sales commissions.
net realizable value
The relationship between the volume of sales and inventory; computed by dividing the inventory at the end of the year by the average daily cost of goods sold.
number of days’ sales in inventory
A detailed listing of merchandise on hand.
physical inventory
The purchase order authorizes the purchase of the inventory from an approved vendor.
purchase order
The form or electronic transmission used by the receiving personnel to indicate that materials have been received and inspected.
receiving report
