A term meaning the seller bears the cost of shipping goods to the buyer's location. Title to the goods remains with the seller while the goods are in transit.First-In, First-Out (FIFO) MethodA method of computing the cost of inventory and the cost of goods sold based on the assumption that the first merchandise acquired is the first merchandise sold and that the ending inventory consists of the most recently acquired goods.A method of estimating the cost of the ending inventory based on the assumption that the rate of gross profit remains approximately the same from year to year. Used for interim valuations and for estimating losses.The cost of goods sold divided by the average amount of inventory. Indicates how many times the average inventory is sold during the course of the year.Just-In-Time (JIT) Inventory SystemA technique designed to minimize a company's investment in inventory. In a manufacturing company, this means receiving purchases of raw materials just in time for use in the manufacturing process and completing the manufacture of finished goods just in time to fill sales orders. Just-in-time also may be described as the philosophy of constantly striving to become more efficient by purchasing and storing less inventory.Last-In, First-Out (LIFO) MethodA method of computing the cost of goods sold by using the prices paid for the most recently acquired units. Ending inventory is valued on the basis of prices paid for the units first acquired.Lower-of-Cost-or-Market (LCM) RuleA method of inventory pricing in which goods are valued at the lower of original cost or replacement cost (market).A method of valuing all units of inventory at the same average per-unit cost, recalculating this cost after each purchase. This method is used in a perpetual inventory system.A systematic count of all goods on hand, followed by the application of unit prices to the quantities counted and development of a dollar valuation of the ending inventory.A method of estimating the cost of goods sold and ending inventory. Similar to the gross profit method, except that the cost ratio is based on the current cost-to-retail price relationships rather than on those of the prior year.Recording as the cost of goods sold the actual costs of the specific units sold. Necessary if each unit in inventory is unique, but not if the inventory consists of homogeneous products.A reduction in the carrying amount of an asset because it has become obsolete or its usefulness has otherwise been impaired. Involves a credit to the appropriate asset account, with an offsetting debit to a loss account.