AJAX progress indicator
  • conservatism
    A general principle of accounting measurement; when in doubt, understate assets and income and overstate liabilities
  • consignment
    To place inventory in the custody of another party without requiring them to purchase it, as a sales agent
  • cost flow assumption
    An assumption about how costs are assigned to inventory in the accounting records
  • first-in, first-out
    FIFO; An inventory cost flow assumption based on the notion that the earliest costs are to be assigned to units sold
  • goods in transit
    Goods in the process of being transported to the buyer; ownership is based on freight terms
  • gross profit method
    A technique that purports to estimate inventory and cost of goods sold by applying historic percentage relationships to observable sales information
  • last-in, first-out method
    LIFO; 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 value
    To report inventory at the lower of its cost or net realizable value
  • moving-average method
    Under 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 inventory
    The process of counting inventory actually on hand
  • retail inventory method
    An inventory costing technique used by retailers that extrapolates inventory values by applying cost-to-retail percentages to known sales and purchase transactions
  • specific identification method
    Inventory costing method where the actual cost of each unit of merchandise is tracked and used for accounting purposes
  • weighted-average inventory method
    Under the periodic inventory system; inventory cost is based on the average cost of units purchased giving consideration to the quantities purchased at different prices