Term
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Definition
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Term
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Definition
| The Costs incurred to purchase or manufacture the merchandise sole during a period. |
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Term
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Definition
| materials purchased for use in manufacturing products. |
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Term
| FOB(Free-on-board) destination |
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Definition
| A business term meaning that the seller of merchandise bears the shipping costs and maintains ownership until the merchandise is delivered to the buyer. |
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Term
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Definition
| A business term meaning that the buyer of merchandise bears the shipping costs and aquires ownership at the point of shipment. |
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Term
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Definition
| An arrangement whereby merchandise owned by one party, the consignor, is sold by another party, the cosignee, usually on a comission basis. |
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Term
| Cost of Goods Available for sale |
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Definition
| THe sodt of all merchandise available for sale during the period; equal to the sum of beginning inventory and net purchases. |
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Term
| Perpetual Inventory System |
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Definition
| A system of accounting for inventory in which detailed records of the number of units and the cost of each purchase and sales transaction are prepared throughout the accounting period. |
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Term
| Periodic Inventory System |
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Definition
| A system of accounting for inventory in which the cost of goods sold is determined and inventory is adjusted at the end of the accounting period, not when merchandise is purchased or sold. |
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Term
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Definition
| The net cost of inventory purchased during a period, after adding the cost of freight in and subtracting returns and discounts. |
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Term
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Definition
| The amount of inventory that is lost, stolen, or spoiled during a period; determined by comparing perpetual inventory records to the physical count of inventory. |
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Term
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Definition
| An inventory cost flow assumption whereby the first goods purchased are assumed to be the first goods sold so that the ending inventory consists of the most recently purchased goods. |
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Term
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Definition
| An inventory cost flow assumption wherby the last goods purchased are assumed to be the first goods sold do that the ending inventory consists of the first goods purchased. |
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Term
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Definition
| An inventory cost flow assumption wherby cost of goods sold and the cost of ending inventory are determined by using an average cost of all merchandise available for sale during the period. |
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Term
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Definition
| A method of valuing inventory and determining cost of goods sold whereby the actual costs of specific inventory items are assigned to them. |
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Term
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Definition
| A measure of the efficiency with which the inventory is managed; Cost of Goods Sold/Average Inventory |
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Term
| Number of days' sales in inventory |
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Definition
| an alternative measure of how well inventory is being managed; 365/inventory turnover |
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Term
| Number of days' purchases in accounts payable |
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Definition
| A measure of how well operating cash flow is being managed; 365/(Purchases/Average Accounts Payable) |
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Term
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Definition
| a procedure for estimating the amount of ending inventory ; Net Sales - Cost of Goods Sold |
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