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Chapter 9 Accounting Terms
Spiceland Accounting - 6th edition
17
Accounting
Undergraduate 3
12/16/2012

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Term
The ____ approach to valueing inventory recognizes losses in the period when the value of inventory declines below its cost.
Definition
lower-of-cost-or-market
Term
GAAP defines market for LCM purposes as the inventory's current replacement cost, except that market should not exceed the ____, or be less than ____
Definition
net realizable value, net realizable value reduced by a normal profit margin
Term
A loss from the write-down of inventory is reported as either a ____ in the income statement or as ____.
Definition
separate item, cost of goods sold
Term
The gross profit method is not acceptable for the preperation of ____ financial statements.
Definition
annual
Term
The retail inventory method uses the cost-to-retail percentage based on a current relationship between ____ and ____.
Definition
cost, selling price
Term
A ____ is a reduction in selling price below the original selling price.
Definition
markdown
Term
By the ____ retail inventory method, markdowns are subtracted in the retail column after the cost-to-retail percentage is calculated.
Definition
conventional
Term
By the ____ retail inventory method, markdowns are subtracted in the retail column before the cost-to-retail percentage is calculated.
Definition
LIFO (or average cost)
Term
By the conventional retail inventory method, beginning inventory is included in the calculation of the ____.
Definition
cost-to-retail percentage
Term
By the LIFO retail inventory method, beginning inventory is ____ in the calculation of the cost-to-retail percentage.
Definition
excluded
Term
In the retail inventory method, ____ shortage is deducted in the retail column after the calculation of the cost-to-retail precentage.
Definition
normal
Term
In the retail inventory method, ____ shortage is deducted in both the cost and retail columns before the calculation of the cost-to-retail precentage.
Definition
abnormal
Term
In the dollar-value retail LIFO, each layer year carries its unique ____ index and its unique ____ percentage.
Definition
retail price, cost-to-retail
Term
For a change in inventory method other than to ____, prior years' financial statements are revised.
Definition
LIFO
Term
Accounting records usually are inadequate for a company changing ____ to employ retrospective treatment.
Definition
to LIFO
Term
If a managerial inventory error is discovered in an accounting period subsequent to the period in which the error is made, any previous years' financial statements that were incorrect as a result of the error are ____ to reflect the correction.
Definition
retrospectively restated
Term
An overstatement of ending inventory in the current year will cause cost of goods sold in the subsequent year to be ____.
Definition
overstated
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