| A | B |
|---|
| Periodic inventory system | an inventory system in which the amount of goods on hand is determined by periodically counting them. |
| Perpetual inventory system | an inventory system in which the business keeps a constant, up-to-date record of the amount of merchandise on hand. |
| point-of-sale terminal | electronic cash register used to enter the code number, quantity, and selling price of the item being sold. |
| consistency principle | applying the same accounting inventory costing methods fromone period to the next |
| First in, first out | a method of assigning a cost to the ending inventory in which it is assumed that the first items purchase were the first items sold; the ending inventory then consists of the last items purchased. |
| Last-in, last out | a method of assigning a cost to the ending inventory in which it is assumed the last items purchased were the first items sold; the ending inventory then consists of the first items purchased. |
| specific identification method | a method of assigning costs to the ending inventory in which the actual cost of each item in the ending inventory is determiend and assigned to the item. |
| weighted average cost method | a method of assigning a cost to the ending inventory in which an average unit cost is assigned to all like items in the inventory |
| gross profit method | a method of estimating the cost of the ending inventory in which teh net sales amount is multiplied by the percentage of gross profit made over a period of time. |
| lower-of-cost-or-market rule | an accounting guideline that states that a business can report the cost of its ending inventory at the calculated cost or at market value, whichever is lower, |
| market value | the current price that is being charged for an item in the marketplace. |
| markup | an amount added to the cost of an item to arrive at its selling price. |
| merchandise inventory turnover | the number of times a company's inventory is sold during a given year; calculated by dividing the cost of merchandise sold by the average merchandise inventory. |
| retail method | a method of estimating the cost of the ending inventory in which the retail value of the ending merchandise inventory is multiplied by a figure representing the relationship betwee the cost of merchandise avaiable for sale and its retail value |
