Cash and receivables
These are the two types of discounts that companies typically offer to customers.
What are (1) trade discounts and (2) sales (or cash) discounts?
If FIFO or average cost is used internally and LIFO is used for external reporting, a conversion must be completed to generate external financial statements. The conversion results in an adjustment amount called the ________ .
What is the LIFO reserve?
These are the two methods that can be used to account for sales discounts.
What are the (1) gross and (2) net methods?
Assuming inventory costs increase over time, the effect of including old "inventory layers" in Cost of Goods Sold is a relatively low Cost of Goods Sold and, therefore, relatively high net income. When this happens, we say there has been a ______ .
LIFO liquidation.
Companies sometimes raise cash by using their accounts receivable. These are the two ways in which accounts receivable can be used to raise cash.
What are secured borrowing and the sale of receivables?
This is an inventory costing method comprising layers of dollar value from different periods and using cost indexes to adjust for changes in price levels over time.
What is dollar value LIFO?
For estimates of future returns, the company records this.
What is a refund liability?
When the expected benefit of unsold inventory is estimated to have fallen below its cost, companies must reduce the value of their inventory in their financial statements by recording this type of adjusting entry.
What is an inventory write down?
Sales returns are recorded with this item in the income statement.
What is with revenue?
This method to estimate an inventory write down is used by companies that use FIFO or the average cost inventory methods.
What is the Lower of cost or net realizable value (LCNRV) method?