Term
| ACTIVITY BASED COST (ABC) METHOD |
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Definition
| COST SYSTEM THAT ALLOCATES COST BASED ON CLEARLY IDENTIFIED CHARACTERISTICS OF THE PRODUCTION PROCESS THAT ARE KNOWN TO CREATE OVERHEAD COSTS |
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Term
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Definition
| AN INVENTORY VALUATION METHOD THAT ASSIGNS THE SAME AVERAGE COST TO EACH ITEM IN THE INVENTORY |
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Term
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Definition
| A REDUCTION IN SALES PRICE ALLOWED IF PAYMENT IS RECEIVED WITHIN A SPECIFIC TIME PERIOD |
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Term
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Definition
| THE NET REALIZABLE VALUE; USED AS AN UPPER LIMIT IN DEFINING MARKET WHEN VALUING INVENTORY AT THE LOWER OF COST OR MARKET |
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Term
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Definition
| INVENTORY THAT IS PHYSICALLY LOCATED AT A DEALER BUT WHOSE OWNERSHIP IS RETAINED BY THE SHIPPER UNTIL THE DEALER SELLS THE INVENTORY |
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Term
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Definition
| CHARACTERISTIC OF THE PRODUCTION PROCESS THAT IS KNOWN TO CREATE OVERHEAD COSTS |
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Term
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Definition
| MATERIALS USED DIRECTLY IN THE PRODUCTION OF GOODS; THE PRIMARY PHYSICAL MATERIALS MAKING UP THE FINAL PRODUCT |
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Term
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Definition
| AN ADAPTATION OF LIFO THAT MEASURES INVENTORY BY TOTAL DOLLAR AMOUNT RATHER THAN BY INDIVIDUAL UNITS. LIFO INCREMENTAL LAYERS ARE DETERMINED BASED ON TOTAL DOLLAR CHANGES |
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Term
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Definition
| THE ACQUISITION COST OF AN ASSET |
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Term
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Definition
| THE VALUE RECEIVED FOR AN ASSET WHEN SOLD |
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Term
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Definition
| MANUFACTURED PRODUCTS FOR WHICH THE MANUFACTURING PROCESS IS COMPLETE |
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Term
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Definition
| AN INVENTORY VALUATION METHOD THAT ASSUMES THAT UNITS SOLD ARE THE FIRST ONES PURCHASED OR MANUFACTURED |
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Term
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Definition
| THE NET REALIZABLE VALUE LESS A NORMAL PROFIT;USED AS A LOWER LIMIT IN DEFINING MARKET WHEN VALUING INVENTORY AT LOWER OF COST OR MARKET |
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Term
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Definition
| TERMS OF SALE UNDER WHICH TITLE OF GOODS PASSES TO THE PURCHASER AT THE POINT OF DESTINATION |
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Term
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Definition
| TERMS OF SALE UNDER WHICH TITLE OF GOODS PASSES TO THE PURCHASER AT THE POINT OF SHIPPING |
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Term
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Definition
| A METHOD OF INVENTORY ACCOUNTING THAT RECORDS INVENTORY COST BEFORE CONSIDERING CASH DISCOUNTS |
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Term
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Definition
| AN INVENTORY ESTIMATION TECHNIQUE BASED ON RELATIONSHIP BETWEEN GROSS PROFIT AND SALES. GROSS PROFIT PERCENTAGE IS USED TO ESTIMATE COST OF GOODS SOLD, WHICH IS USED TO ESTIMATE THE VALUE OF INVENTORY NOT YET SOLD |
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Term
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Definition
| GROSS PROFIT DIVIDED BY SALES; A MEASURE OF THE PROFITABILITY OF SALES IN RELATION TO THE COST OF GOODS SOLD |
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Term
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Definition
| MATERIALS THAT ARE NECESSARY TO FACILITATE THE PRODUCTION PROCESS BUT ARE NOT DIRECTLY INCORPORATED IN TO THE FINAL PRODUCT |
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Term
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Definition
| ASSETS HELD FOR SALE IN THE NORMAL COURSE OF BUSINESS; ALSO ASSETS HELD TO BE USED AS MATERIALS IN THE PRODUCTION PROCESS |
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Term
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Definition
| MEASURED BY DIVIDING COST OF GOODS SOLD BY AVERAGE INVENTORY; USED TO EVALUATE WHETHER THE LEVEL OF INVENTORY IS APPROPRIATE, GIVEN THE VOLUME OF BUSINESS |
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Term
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Definition
| AN INVENTORY VALUATION METHOD THAT ASSUMES THE LAST UNITS SOLD ARE THE MOST RECENT ONES PURCHASED OR MANUFACTURED |
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Term
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Definition
| A FEDERAL TAX REGULATION THAT REQUIRES THE USE OF LIFO FOR FINANCIAL REPORTING PURPOSES IF LIFO IS USED FOR INCOME TAX PURPOSES |
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Term
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Definition
| A GROUP OF INVENTORY ITEMS HAVING COMMON CHARACTERISTICS AND ASSUMED TO BE THE SAME WHEN APPLYING LIFO |
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Term
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Definition
| AN INCREMENTAL GROUP OF LIFO INVENTORY ITEMS CREATED IN ANY YEAR IN WHICH THE NUMBER OF UNITS PURCHASED OR PRODUCED EXCEEDS THE NUMBER SOLD |
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Term
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Definition
| REDUCTION OR ELIMINATION OF OLD LIFO LAYERS BECAUSE TOTAL PURCHASES OR PRODUCTION IN THE CURRENT PERIOD IS LESS THAN SALES |
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Term
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Definition
| THE DIFFERENCE BETWEEN LIFO ENDING INVENTORY AND THE AMOUNT OBTAINED USING ANOTHER METHOD SUCH AS FIFO OR AVERAGE COST |
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