Accounting chap 5 vocab - Vocab Chapter 5 Cost of goods available for sale beginning inventory plus cost of goods purchased Cost of goods sold cost of

Vocab Chapter 5 • Cost of goods available for sale – beginning inventory plus cost of goods purchased. • Cost of goods sold – cost of goods available for sale minus ending inventory. • FIFO method – an inventory costing method that assigns the most recent costs to ending inventory. • Finished goods – a manufacturer’s inventory that is complete and ready for sale. • FOB destination point – terms that require the seller to pay for the cost of shipping the merchandise to the buyer. • FOB shipping point – terms that require the buyer to pay for the shipping costs. • Gross profit – net sales less cost of goods sold; gross margin. • Gross profit method – a technique used to establish an estimate of the cost of inventory stolen, destroyed, or otherwise damaged or of the amount of inventory on hand at an interim date. • Gross profit ration – gross profit divided by net sales.