Arizona State University Campus Immersion ACC 231 Exam #2 ||
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Finished Goods correct answers Inventory of goods ready to sell.
Raw Materials correct answers Inventory items used in the production of goods.
Work In Process correct answers Inventory of partially completed goods.
Specific-identification correct answers Inventory costing metod in which a business uses the
specific cost of each unit of inventory; also called the specific-unit-cost method.
FIFO correct answers Inventory costing method in which the first inventory costs incurred are
the first costs to be assigned to cost of goods sold. FIFO leaves in ending inventory the last, most
recent, costs incurred.
LIFO correct answers Inventory costing method in which the last inventory costs incurred are the
first costs to be assigned to cost of goods sold. LIFO leaves in ending inventory the first, the
oldest, costs incurred.
Average Cost correct answers Inventory costing method where, after each purchase of inventory,
a new weighted average cost per unit is computed and is used to value ending inventory and cos
of goods sold.
Inventory Layer correct answers A record of the quantity of and the cost of inventory items made
in a single purchase.
Cost of Goods Available for Sale correct answers The cost of inventory on hand at the beginning
of the period plus the net cost of inventory purchased during the period.
, Perpetual Inventory Record correct answers A record that tracks the quantity of, and cost of
assigned to, inventory items as they are purchased and sold.
Consistency Principle correct answers Accounting principle that states that a business should use
the same accounting methods and procedures from period to period.
Conservatism correct answers Accounting principle that states that a business must report all
items in the financial statements at amounts that lead to the most cautious immediate results.
LCM Rule correct answers The rule that a business must report inventory in the financial
statements at whichever is lower, the historical cost or the market value, of each inventory item.
Materiality correct answers Accounting principle that states that a company must perform strictly
proper accounting only for items that are significant for the business's financial statements.
Information is significant, or material, when its presentation in the financial statements would
cause someone to change a decision.
Full-Disclosure Principle correct answers Accounting principle that states that a company's
financial statements should report enough information for users to make knowledgeable
decisions about the company.
Footnotes correct answers Disclosures that accompany the financial statements.
Inventory Shrinkage correct answers The loss of inventory.
Gross Profit Method correct answers A way to estimate ending inventory by using the gross
profit percentage.
Inventory Turnover correct answers The ratio of cost of goods sold to average inventory.
A+ Verified Already.
Finished Goods correct answers Inventory of goods ready to sell.
Raw Materials correct answers Inventory items used in the production of goods.
Work In Process correct answers Inventory of partially completed goods.
Specific-identification correct answers Inventory costing metod in which a business uses the
specific cost of each unit of inventory; also called the specific-unit-cost method.
FIFO correct answers Inventory costing method in which the first inventory costs incurred are
the first costs to be assigned to cost of goods sold. FIFO leaves in ending inventory the last, most
recent, costs incurred.
LIFO correct answers Inventory costing method in which the last inventory costs incurred are the
first costs to be assigned to cost of goods sold. LIFO leaves in ending inventory the first, the
oldest, costs incurred.
Average Cost correct answers Inventory costing method where, after each purchase of inventory,
a new weighted average cost per unit is computed and is used to value ending inventory and cos
of goods sold.
Inventory Layer correct answers A record of the quantity of and the cost of inventory items made
in a single purchase.
Cost of Goods Available for Sale correct answers The cost of inventory on hand at the beginning
of the period plus the net cost of inventory purchased during the period.
, Perpetual Inventory Record correct answers A record that tracks the quantity of, and cost of
assigned to, inventory items as they are purchased and sold.
Consistency Principle correct answers Accounting principle that states that a business should use
the same accounting methods and procedures from period to period.
Conservatism correct answers Accounting principle that states that a business must report all
items in the financial statements at amounts that lead to the most cautious immediate results.
LCM Rule correct answers The rule that a business must report inventory in the financial
statements at whichever is lower, the historical cost or the market value, of each inventory item.
Materiality correct answers Accounting principle that states that a company must perform strictly
proper accounting only for items that are significant for the business's financial statements.
Information is significant, or material, when its presentation in the financial statements would
cause someone to change a decision.
Full-Disclosure Principle correct answers Accounting principle that states that a company's
financial statements should report enough information for users to make knowledgeable
decisions about the company.
Footnotes correct answers Disclosures that accompany the financial statements.
Inventory Shrinkage correct answers The loss of inventory.
Gross Profit Method correct answers A way to estimate ending inventory by using the gross
profit percentage.
Inventory Turnover correct answers The ratio of cost of goods sold to average inventory.
