Inventory Costing
True/False: The LIFO inventory costing method assumes that the most recently purchased items are sold first
What is true?
The customized software that helps manage a company's core business operations, commonly referred to by the acronym ERP
What is Enterprise-resource planning software?
The action a company is required to take to verify the actual amount of inventory and make necessary adjustments
What is a physical count of inventory?
The account type of Sales Revenue
What is a Revenue?
Subsidiary ledgers are similar to multi-step income statements in that they allow more _____ in their respective reports
What is detail?
How to calculate weighted average in the titular inventory costing method
What is total cost / total units?
The journal entry for recording shrinkage
What is Debit COGS, Credit Merchandise Inventory?
The inventory value GAAP requires a company to report if the cost of inventory is $1200 but the market value of that inventory is $800
What is $800 (Lower of Cost or Market)?
The account type of Merchandise Inventory
What is an Asset?
The special journal where cash is always credited
What is the Cash Disbursements Journal?
The inventory costing method which produces higher net income during a period of rising costs (inflation)
What is FIFO?
The meaning of credit terms 3/10, n/30, FOB Destination
What is a 3% discount if paid within 10 days, otherwise net amount is due in 30 days, Seller pays for shipping?
The owner of inventory during shipping when credit terms are FOB Shipping Point
Who is the Buyer?
The account type of Accounts Receivable
What is an Asset?
The special journal where Accounts Payable is always credited
What is the Purchases Journal?
The inventory costing method which produces lower net income during a period of rising costs (inflation)
What is LIFO?
The formula for net sales
What is Sales Revenue - (Sales Discounts + Sales Returns & Allowances)?
The owner of inventory in a consignor & consignee relationship
Who is the Consignor?
The account type of Cost of Goods Sold (COGS)
What is an expense?
The role of a controlling account
What is to equal the sum of all subsidiary account balances?
Word Problem: If Company A has 50 units of inventory from a 2/15 purchase, and 25 units of inventory from a 2/25 purchase, which units are sold if Company A sells 60 units under the FIFO method on 2/28?
What is 50 units from 2/15 and 10 units from 2/25?
The formula for gross profit
What is Net Sales - COGS?
The two accounts that Cost of Goods Available for Sale must be allocated between by the end of the period
What are ending inventory and COGS?
The account type of Sales Returns & Allowances and Sales Discounts
What is a Contra-Revenue?
The two columns always used in the Sales Journal, or the two journal entries completed when making a sale of inventory on credit
What is Debit A/R, Credit Sales and Debit COGS, Credit Inventory?