Chapter 6 Vocab 1) Average Cost Method: Inventory costing method that uses the weighted-average unit cost to allocate to ending inventory and COGS the cost of goods available for sale. 2) Conservatism: Concept that dictates that when in doubt, choose the method that will be least likely to overstate assets and net income. 3) Consigned Goods: Goods held for sale by one party although ownership is retained by another party. 4) Consistency Principle: Dictates that a company use the same accounting principles and methods from year to year. 5) Current Replacement Cost: The current cost to replace an inventory item. 6) Days in Inventory: Measure of the average number of days inventory is held; calculated as 365 divided by inventory turnover ratio. 7) Finished Goods Inventory: Manufactured items that are completed and ready for sale. 8) FIFO Method: Inventory costing method that assumes that the costs of the earliest goods purchased are the first to be recognized as COGS.
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This note was uploaded on 11/14/2011 for the course ACCT 272 taught by Professor Mensah during the Fall '08 term at Rutgers.