Vocabulary
These will be converted to cash, sold or used up during the next 12 months.
What is a current asset?
The specific cost of each unit of inventory determines ending inventory and cost of goods sold
What is specific identification method?
The first step in the closing process
What is closing revenues to the income summary?
Notes receivable and other investments held for a longer term than 12 months
What is a long-term investment?
The last costs into inventory are the first costs out to cost of goods sold ; ending inventory is based on costs of the oldest inventory
What is LIFO?
These accounts are closed in the closing process
What is a temporary account?
Long-term assets with no physical form
What is an Intangible Asset?
The first costs into inventory are the first costs out to cost of goods sold: ending inventory is based on the costs of the most recent purchases.
What is FIFO?
What is a temporary account?
What is the disclosure principle?
This method is based on the weighted average cost per unit of inventory after each purchase. It is determined by dividing the cost of goods available for sale by the number of units available for sale.
What is the weighted average method?
the last step in the closing process
What is closing dividends to retained earnings
A company must preform strictly proper accounting only for significant items
What is the materiality concept?
Only ___ accounts occur on the post closing trial balance.
What are permanent accounts?