All about Inventory

Other Terms

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$100 $100 $100

$200 $200 $200

$300 $300 $300

$400 $400 $400

$500

W. Avg & Specific ID

$400

$100

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$300

$500

LIFO & FIFO

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All About Inventory - $100

Property held for sale in the normal course of business, or to be combined with other items to produce goods for sale.

What is Inventory?

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All About Inventory - $200

Beginning inventory plus purchases for the period.

What is Goods Available for Sale?

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All About Inventory - $300

Number of units sold times the unit cost of the items sold.

What is Cost of Goods Sold (COGS or CGS)?

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All About Inventory - $400

The Cost of Goods Sold equation.

What is Beginning Inventory + Purchases – Ending Inventory = COGS?

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All About Inventory - $500

Goods in the process of being manufactured but that are not yet complete.

What is Work in Process Inventory?

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LIFO & FIFO - $100

The method of inventory costing in which the costs of the first goods purchased are assigned to the first goods sold.

What is FIFO (first-in, first-out)?

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LIFO & FIFO - $200

The method of inventory costing in which the costs of the last goods purchased are assigned to the first goods sold.

What is LIFO (last-in, first-out)?

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LIFO & FIFO - $300

Buy items at $1, $2, and $3 in that order; ____ is the cost assigned to the first item sold under LIFO.

What is $3?

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LIFO & FIFO - $400

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Buy items at $1, $2, and $3 in that order; __&__ are the costs assigned to the first two items sold under FIFO.

What are $1 and $2?

LIFO & FIFO - $500

Assigns the oldest unit costs to CoGS and the newest unit costs to Inventory.

What is FIFO?

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W. Avg & Specific ID - $100

Uses the weighted average unit cost of the goods available for sale for both CoGS and Ending Inventory.

What is Weighted Average Cost?

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W. Avg & Specific ID - $200

$ Cost of goods available for sale # of units available for sale

What is the Weighted Average Cost of goods available for sale?

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W. Avg & Specific ID - $300

DAILY DOUBLE!!!

W. Avg & Specific ID - $400

Costing method that identifies the cost of the specific item that is sold.

What is Specific Identification?

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W. Avg & Specific ID - $500

The Weighted Average CoGS amount when 2 items are purchased at $0.50 ea. and 3 at $3 ea.; and 4 are sold. (Try it without a calculator.)

What is $8? ($10/5 items = $2/item)

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Other Terms - $100

The initial stage of inventory, as used by manufacturers.

What is Raw Materials?

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Other Terms - $200

CoGS divided by average inventory.

What is Inventory Turnover Ratio?

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Other Terms - $300

Valuation rule that requires the inventory account to be reduced when the value of inventory falls below its cost.

What is Lower of Cost or Market (LCM)?

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Other Terms - $400

365/Inventory Turnover Ratio.

What is Days to Sell?

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Other Terms - $500

If costs per unit are increasing a company using FIFO will face _____(higher or lower) income tax expense.

What is higher?

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The account into which the cost of transportation is recorded when a perpetual inventory system is used.

What is Inventory?

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The accounts affected by a Sales Return.

What are Sales Returns and Allowances, Cash (or A/R), Inventory, and Cost of Goods Sold?

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This expression describes reductions in the cost of inventory purchases associated with unsatisfactory goods.

What are Purchase Returns and Allowances?

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The internal control principle that relates to preparing a bank reconciliation.

What is independent verification?

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The internal control principle that encourages companies to create a record of each transaction.

What is “document procedures”?

Daily Double Specify Your Wager!

W. Avg & Specific ID ---

The two categories into which inventory costing methods split the total dollar amount of goods available for sale.

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What are CoGS and Ending Inventory?