Matching
Match each of the following terms with the appropriate definition.
Premises:
The accounting principle that aims to select the less optimistic estimate when two or more estimates are about equally likely.
A method for estimating an ending inventory based on the ratio of the amount of goods for sale at cost to the amount of goods for sale at retail price.
The expected sales price of an item minus the cost of making the sale.
An inventory valuation method that assumes that inventory items are sold in the order acquired.
The number of times a company's inventory is sold during a period.
An inventory valuation method where the purchase cost of each item in ending inventory is identified and used to determine the cost assigned to inventory.
Financial statements prepared for periods of less than one year.
An inventory valuation method that assumes costs for the most recent items purchased are sold first and charged to cost of goods sold.
An inventory pricing method that assumes the unit prices of the beginning inventory and of each purchase are weighted by the number of units of each in inventory; the calculation occurs at the time of each sale.
An estimate of days needed to convert the inventory at the end of the period into receivables or cash.
Responses:
Interim statements
Inventory turnover
LIFO method
Net realizable value
Conservatism constraint
FIFO method
Days' sales in inventory
Specific identification method
Weighted average inventory method
Retail inventory method
Correct Answer:
Premises:
Responses:
The accounting principle that aims to select the less optimistic estimate when two or more estimates are about equally likely.
A method for estimating an ending inventory based on the ratio of the amount of goods for sale at cost to the amount of goods for sale at retail price.
The expected sales price of an item minus the cost of making the sale.
An inventory valuation method that assumes that inventory items are sold in the order acquired.
The number of times a company's inventory is sold during a period.
An inventory valuation method where the purchase cost of each item in ending inventory is identified and used to determine the cost assigned to inventory.
Financial statements prepared for periods of less than one year.
An inventory valuation method that assumes costs for the most recent items purchased are sold first and charged to cost of goods sold.
An inventory pricing method that assumes the unit prices of the beginning inventory and of each purchase are weighted by the number of units of each in inventory; the calculation occurs at the time of each sale.
An estimate of days needed to convert the inventory at the end of the period into receivables or cash.
Premises:
The accounting principle that aims to select the less optimistic estimate when two or more estimates are about equally likely.
A method for estimating an ending inventory based on the ratio of the amount of goods for sale at cost to the amount of goods for sale at retail price.
The expected sales price of an item minus the cost of making the sale.
An inventory valuation method that assumes that inventory items are sold in the order acquired.
The number of times a company's inventory is sold during a period.
An inventory valuation method where the purchase cost of each item in ending inventory is identified and used to determine the cost assigned to inventory.
Financial statements prepared for periods of less than one year.
An inventory valuation method that assumes costs for the most recent items purchased are sold first and charged to cost of goods sold.
An inventory pricing method that assumes the unit prices of the beginning inventory and of each purchase are weighted by the number of units of each in inventory; the calculation occurs at the time of each sale.
An estimate of days needed to convert the inventory at the end of the period into receivables or cash.
Responses:
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