E 8-24 Listed below are several terms and phrases associated with inventory measurement. Pair each item from List A with the item from List B (by letter) that is most appropriately associated with it.
E 8-24 Concepts; terminology
Chapter8: Inventories: Measurement
Listed below are several terms and phrases associated with inventory measurement. Pair each item from List A with the item from List B (by letter) that is most appropriately associated with it.
List A List B
1. Perpetual inventory system a. Legal title passes when goods are delivered to common
carrier.
2. Periodic inventory system b. Goods are transferred to another company but title remains
with transferor.
3. F.o.b. shipping point c. Purchase discounts not taken are included in inventory cost.
4. Gross method d. If LIFO is used for taxes, it must be used for financial
eporting.
5. Net method e. Items sold are those acquired first.
6. Cost index f. Items sold are those acquired last.
7. F.o.b. destination g. Purchase discounts not taken are considered interest expense.
8. FIFO h. Used to convert ending inventory at year-end cost to base year
cost.
9. LIFO i. Continuously records changes in inventory.
10. Consignment j. Items sold come from a mixture of goods acquired during the
period.
11. Average cost k. Legal title passes when goods arrive at location.
12. IRS conformity rule l. Adjusts inventory at the end of the period.CLICK HERE FOR THE SOLUTION
