Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
33 Cards in this Set
- Front
- Back
Asset items a company holds for sale in ordinary course of business or goods to be used in production of goods to sell |
Inventory |
|
Cost assigned to unsold units left on hand |
Merchandise inventory |
|
Costs assigned to raw materials on hand but not in production |
Raw materials inventory |
|
Cost of unfinished raw material in process, DL and manuf OH applied to these units |
Work in process inventory |
|
Costs of completed but unsold units on hand at end of fiscal period |
Finished goods inventory |
|
Continuously track changes in Inventory account |
Perpetual invent system |
|
Tracks changes in Inventory on hand periodically |
Periodic invent system |
|
System that provides detailed inventory records of incr and decr in quantity only- not dollar amounts |
Modified perpetual invent system |
|
Accept goods for sale w/o liability except exercise due care and reasonable protection |
Consigned goods |
|
Sum of BI + purchases during period |
COGAS |
|
Difference b/t COGAS and EI |
COGS |
|
Title passes at point of shipping; buyer pays shipping |
FOB shipping pt |
|
Title passes at point of arrival; seller pays shipping |
FOB destination |
|
Costs directly related to products and bringing goods to buyer and getting them sellable; ie- freight |
Product costs |
|
Costs indirectly related to production or acquisitions of goods; ie- interest |
Period costs |
|
Indicates Co. reports purchases and AP using gross method |
Purchase discounts |
|
Under this method, Co reports purchase disc as deduction from purchases on inc stmt |
Gross method |
|
Indicates Co. records failure to take a purchase discount in Purchase Discount Lost acct |
Net of cash disc.; net method |
|
Objective of Co to value inventory by method that most clearly reflects periodic income |
Cost flow assumption |
|
Method of invent valuation that calls for ID-ing each item sold and each item in inventory |
Specific ID |
|
Method that prices items in inventory on basis of avg cost of similar goods avail in pd |
Avg-cost method |
|
Total COGAS/ # of units avail for sale = cost per unit COGAS - COGS = EI EI units x unit cost = EI COGS units x unit cost = COGS |
Weighted-avg method |
|
Average cost with perpetual invent |
Moving-avg method |
|
Method that assumes first goods purch are first used |
FIFO |
|
Method that fails to match current costs with current revenues |
FIFO |
|
Method that assumes last goods purch are first sold |
LIFO |
|
Erosion of LIFO inventory |
LIFO liquidation |
|
Pooling items of similar nature to alleviate LIFO liquidation |
Specific-goods pooled approach |
|
Method that measures inc/dec in a pool in terms of dollar amt instead physical count |
Dollar-value LIFO |
|
Law that requires a Co. that uses LIFO for tax purpose to also use LIFO for financial stmts |
LIFO conformity rule |
|
Adv of LIFO |
Match curr cost to curr revs tax benefits (due to deferred tax income) Earning hedge- minimizes write-downs due to low record invent |
|
Disadv of LIFO |
Lower profits Invent understmt LIFO liquidation/poor buying habits |
|
Use LIFO when: |
Inflation expect Stable invent level expect Assumed users of fin stmt capable of underst and adjust effect of LIFO on fin stmt |