> 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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Match each description with the correct term. Goods held for sale by one [Choose ] party although ownership of [Choose ] Consigned goods the goods is retained by another party. Net realizable value Inventory system in which companies manufacture or purchase goods only when needed for use. FOB (free on board) shipping point Dictates that a company use the same accounting principles FOB (free on board) destination and methods from year to year. Consistency concept Freight terms indicating that [ Choose ] ownership of the goods remains with the seller until the goods reach the buyer. Freight terms indicating that [ Choose ] ownership of the goods passes to the buyer when the public carrier accepts the goods from the seller. Net amount that a company [Choose ] expects to realize (receive) from the sale of inventory. Specifically, it is the estimated selling price in the normal course of business, less estimated costs to complete and sell. > >
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Subject: acounting
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