Term
| Specific identification method |
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Definition
| An inventory costing method that relies on matching unit costs with the actual units sold. |
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Term
| Weighted average cost method |
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Definition
| An inventory costing method that assigns the same unit cost to all units available for sale during the period. |
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Term
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Definition
| An inventory costing method that assigns the most recent costs to ending inventory. |
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Term
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Definition
| An inventory costing method that assigns the most recent costs to costs of goods sold. |
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Term
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Definition
| The result of selling more units than are purchased during the period, which can have negative tax consequences if a company is using LIFO. |
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Term
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Definition
| The IRS requirement that when LIFO is used on a tax reurn, it must also be sued in reporting income to stockholders. |
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Term
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Definition
| The excess of value of a company's inventory stated at FIFO over the value stated at LIFO. |
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Term
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Definition
| The current cost of a unit of inventory. |
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Term
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Definition
| The portion of the gross profit that results from holding inventory during a period of rising prices. |
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Term
| Lower-of-cost-or-market (LCM) rule |
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Definition
| A conservative inventory valuation approach that is an attempt to anticipate declines in the value of inventory before its actual sale. |
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Term
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Definition
| A measure of the number of times inventory is sold during a period. |
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Term
| Number of days's sales in inventory |
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Definition
| A measure of how long it takes to sell inventory. |
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Term
| Moving average (Appendix) |
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Definition
| The name given to an average cost method when a weighted average cost assumption is used with a perpetual inventory system. |
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