Problem Solving Survival Guide to accompany Financial Accounting, 8th Edition

EXERCISE 6-11

Purpose: (L.O. 1 thru 8) This exercise will quiz you about terminology used in this chapter.

A list of accounting terms with which you should be familiar appears below.

Average-cost method	**Gross profit method
Conservatism	Inventory turnover
Consigned goods	Just-in time (JIT) inventory method
Consistency principle	Last-in, first out (LIFO) method
Current replacement cost	Lower of cost or market (LCM) basis
Days in inventory	Raw materials
Finished goods inventory	**Retail inventory method
First-in, first-out (FIFO) method	Specific identification method
FOB (free on board) destination	Weighted-average unit cost
FOB (free on board) shipping point	Work in process

**These items appear in Appendix 6B in the text.

Instructions

For each item below, enter in the blank the term that is described.

1. ____________________________________An actual inventory physical flow costing method in which items still in inventory are specifically costed to arrive at the total cost of the ending inventory.
2. ____________________________________An inventory cost flow method that assumes that the goods available for sale have the same (average) cost per unit; generally they are identical.
3. ____________________________________An inventory cost flow method that assumes that the costs of the earliest goods acquired are the first to be recognized as cost of goods sold.
4. ____________________________________An inventory cost flow method that assumes that the costs of the latest ...