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Unformatted text preview: Specific Identification:-Matches the expense of a particular item made with the sale of that item-Matches each unit sold during the period with its real cost LIFO Method:-Matches the expense of the first items purchased with sales-Provides better matching of current revenues with current inventory costs Calculating Operating Income:-Includes: o Utility expense o Cost of goods sold o General and administrative expenses Perpetual Inventory System:-Account is continually adjusted-Tracks units from purchase to sale FOB Shipping Point:-Means title to the goods passes when they are shipped LCM Rule:-Represents an application of the conservatism principle or concept FIFO Inventory Cost Flow Assumption:-Typically approximates the actual physical flow of inventory items of most companies...
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- Fall '08
- Financial Accounting, actual physical flow