Term
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Definition
| An inventory costing method in which inventory is priced at the average cost of the goods available for sale during the period. |
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Term
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Definition
| Merchandise that its owner (the consignor) places on the premises of another company (the consignee) with the uderstanding that payment is expected only when the mrechandise is sold and that unsold items may be returned to the consigner. |
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Definition
| The association of costs with their assumed flow in the operations of a company. |
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Term
| First-in, first-out (FIFO) method |
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Definition
| An inventory costing method based on the assumption that the costs of the first items acquired should be assigned to the first items sold. |
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Term
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Definition
| The actual physcial movements of goods in the operations of a company. |
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Definition
| A method of inventory estimation based on the assumption that the ratio of gross margin for a business remains relatively stable from year to year. Also called gross margin method. |
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Term
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Definition
| The invoice price of an asset less purchases discounts, plus freight in, pus applicable taxes and tariffs. |
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Term
| Just-in-time operating environment |
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Definition
| A method of reducing levels of inventory by working closely with suppliers to coordinate and schedule deliveries so that goods arrive just at the time they are needed. |
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Term
| Last-in, first out (LIFO) method |
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Definition
| An inventory costing method based on the assumption that the costs of the last items purchaed should be assigned to the first items sold. |
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Term
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Definition
| The reduction of inventory below previous levels because sales of older, lower-priced units have exceeded the purchases of units for the current period. |
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Term
| Lower-of-cost-or-market (LCM) rule |
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Definition
| A method of valuing inventory at an amount less than cost when the replacement cost falls below historical cost. |
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Term
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Definition
| Current replacement cost of inventory. |
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Term
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Definition
| A method of inventory estimation, used in retail merchandising businesses, in which inventory at retail value is reduced by the ratio of cost to retail price. |
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Term
| Specific identification method |
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Definition
| An inventory costing method in which the cost of each item in ending inventory is identified as coming from a specific purchase. |
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Definition
| A system of managing inventory and purchasing through business-to-business transactions conducted over the Internet. |
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Term
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Definition
The average number of days required to sell the inventory on hand;
Number of Days in a Year ÷Inventory Turnover |
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Term
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Definition
| A ratio indicating the number of times a company's average inventory is sold during an accounting period; Cost of Goods Sold ÷ Average Inventory. |
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