- conservatismA general principle of accounting measurement; when in doubt, understate assets and income and overstate liabilities
- consignmentTo place inventory in the custody of another party without requiring them to purchase it, as a sales agent
- cost flow assumptionAn assumption about how costs are assigned to inventory in the accounting records
- first-in, first-outFIFO; An inventory cost flow assumption based on the notion that the earliest costs are to be assigned to units sold
- goods in transitGoods in the process of being transported to the buyer; ownership is based on freight terms
- gross profit methodA technique that purports to estimate inventory and cost of goods sold by applying historic percentage relationships to observable sales information
- last-in, first-out methodLIFO; An inventory cost flow assumption based on the notion that the most recent costs are to be assigned to units sold
- lower of cost or net realizable valueTo report inventory at the lower of its cost or net realizable value
- moving-average methodUnder the perpetual inventory system; to recompute running average cost with each purchase transaction
- net realizable value (NRV)(inventory) Estimated selling price in the normal course of business, less reasonably predictable costs of completion, disposal, and transportation
- physical inventoryThe process of counting inventory actually on hand
- retail inventory methodAn inventory costing technique used by retailers that extrapolates inventory values by applying cost-to-retail percentages to known sales and purchase transactions
- specific identification methodInventory costing method where the actual cost of each unit of merchandise is tracked and used for accounting purposes
- weighted-average inventory methodUnder the periodic inventory system; inventory cost is based on the average cost of units purchased giving consideration to the quantities purchased at different prices
