40644759
Description
Flashcards by TIAH BECKER, updated 3 months ago
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Created by TIAH BECKER
3 months ago
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| Question | Answer |
| Average inventory | Total of all inventories divided by number of times inventory taken |
| Distribution of overhead | Companies distribute overhead by floor space or sales volume |
| First-in, first-out (FIFO) method | This method assumes the first inventory brought into the store will be the first sold. Ending inventory is made up of goods most recently purchased |
| Gross profit method | Used to estimate value of inventory |
| Inventory turnover | Ratio that indicates how quickly inventory turns |
| Just-in-time (JIT) inventory system | System that eliminates inventories. Suppliers provide materials daily as manufacturing company needs them |
| Last-in, first-out (LIFO) method | This method assumes the last inventory brought into the store will be the first sold. Ending inventory is made up of the oldest goods purchased |
| Overhead expenses | Operating expenses not directly associated with a specific department or product |
| Periodic inventory system | Physical count of inventory taken at end of a time period. Inventory records are not continually updated |
| Perpetual inventory system | Inventory records are continually updated; opposite of periodic inventory system |
| Retail method | Method to estimate cost of ending inventory. The cost ratio times ending inventory at retail equals the ending cost of inventory |
| Specific identification method | This method calculates the cost of ending inventory by identifying each item remaining to invoice price |
| Weighted-average method | Calculates the cost of ending inventory by applying an average unit cost to items remaining in inventory for that period of time |
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