| A | B |
|---|
| Purchases | temporary account used in Periodic system to record inventory purchases |
| Purchase Discounts | contra-purchases account to record discounts |
| Freight-In | adjunct-purchases account |
| Periodic Inventory System | system that determines Cost of Goods Sold at the end of the period |
| Gross Profit | Net Sales less Cost of Goods Sold |
| Net Purchases | Gross Purchases less Purchase Discounts & Returns and Allowances |
| LIFO | Current costs assigned to Cost of Goods Sold |
| FIFO | Current costs assigned to Ending Inventory |
| Net Sales | Sales less Sales Discounts & Returns and Allowances |
| Sales Discounts | contra-sales account |
| FOB Shipping Point | Ownership transferred at pickup point |
| FOB Destination | Ownership transferred at destination point |
| Specific Identification | identifies and assigns cost of specific items sold to COGS |
| Inventory Turnover Ratio | Cost of Goods Sold divided by Average Inventory |
| Days in Inventory | how many days takes to sell inventory |
| Lower of Cost or Market | Required for balance sheet valuation of inventory so as not to violate conservatism |
| First-In, First Out (FIFO) | Cost flow assumption that reports highest Net Income |
| Last-In, First Out (LIFO) | Cost flow assumption with lowest tax liability |
| Weighted Average | Assumes that a weighted average cost has been applied to all units |
| Cost of Goods Sold | Beginning Inventory + Net Purchases + Freight In - Ending Inventory |
