> Exercises For all exercises, assume the perpetual inventory system is used unless stated otherwise. E6-14 Using accounting vocabulary Match the accounting terms with the corresponding definitions. 1. Specific identification a. Treats the oldest inventory purchases as the first units sold. 2. Materiality concept b. Requires that a company report enough information for outsiders to make knowledgeable decisions. 3. Last-in, first-out (LIFO) 4. Conservatism c. Identifies exactly which inventory item was sold. Usually used for higher cost inventory. 5. Consistency principle 6. Weighted-average 7. Disclosure principle d. Calculates a weighted-average cost based on the cost of goods available for sale and the number of units available. B. First-in, first-out (FIFO) e. Principle whose foundation is to exercise caution in reporting financial statement items. f. Treats the most recent/newest purchases as the first units sold. g. Businesses should use the same accounting methods from period to period. h. Principle that states significant items must conform GAAP.

> Exercises For all exercises, assume the perpetual inventory system is used unless stated otherwise. E6-14 Using accounting vocabulary Match the accounting terms with the corresponding definitions. 1. Specific identification a. Treats the oldest inventory purchases as the first units sold. 2. Materiality concept b. Requires that a company report enough information for outsiders to make knowledgeable decisions. 3. Last-in, first-out (LIFO) 4. Conservatism c. Identifies exactly which inventory item was sold. Usually used for higher cost inventory. 5. Consistency principle 6. Weighted-average 7. Disclosure principle d. Calculates a weighted-average cost based on the cost of goods available for sale and the number of units available. B. First-in, first-out (FIFO) e. Principle whose foundation is to exercise caution in reporting financial statement items. f. Treats the most recent/newest purchases as the first units sold. g. Businesses should use the same accounting methods from period to period. h. Principle that states significant items must conform GAAP.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Subject: acounting
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