| A) | An owner of goods who ships them to another party who will then sell the goods for the owner. (p. 347)
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| B) | The policies and procedures used to protect assets, ensure reliable accounting, promote efficient operations, and urge adherence to company policies. (p. 348)
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| C) | The required method of reporting merchandise inventory in the balance sheet where market value is reported when market is lower than cost; the market value may be defined as net realizable value or current replacement cost on the date of the balance sheet. (p. 360)
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| D) | The expected sales price of an item minus the cost of making the sale. (p. 347)
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| E) | Measures how much of net sales is gross profit; calculated as gross profit divided by net sales; also known as the gross margin ratio. (p. 365)
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| F) | Defined as either net realizable value or replacement cost. (p. 361)
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| G) | The number of times a company's average inventory was sold during an accounting period, calculated by dividing cost of goods sold by the average merchandise inventory balance; also called inventory turnover. (p. 376)
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| H) | A periodic inventory pricing system in which the total cost of goods available for sale is divided by the total units available for sale. The resulting weighted average unit cost is multiplied by the units in ending inventory and then by the units that were sold. (p. 371)
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| I) | The pricing of an inventory where the purchase invoice of each item in the ending inventory is identified and used to determine the cost assigned to the inventory. (p. 350)
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| J) | The pricing of an inventory under the assumption that the items most recently purchased are sold first and their costs are charged to cost of goods sold. (p. 352)
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| K) | The GAAP that requires financial statements (including footnotes) to report all relevant information about the operations and financial position of the entity. (p. 358)
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| L) | A procedure for estimating an ending inventory in which the past gross profit rate is used to estimate cost of goods sold, which is then subtracted from the cost of goods available for sale to determine the estimated ending inventory. (p. 365)
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| M) | A perpetual inventory pricing system in which the unit cost in inventory is recalculated at the time of each purchase by dividing the total cost of goods available for sale at that point in time by the corresponding total units available for sale. The most current moving weighted average cost per unit is multiplied by the units sold to determine cost of goods sold. (p. 351)
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| N) | An estimate of how many days it will take to convert the inventory on hand into accounts receivable or cash; calculated by dividing the ending inventory by cost of goods sold and multiplying the result by 365. (p. 377)
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| O) | A method for estimating an ending inventory cost based on the ratio of the amount of goods for sale at cost to the amount of goods for sale at marked selling prices. (p. 366)
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| P) | This GAAP states that an amount may be ignored if its affect on the financial statements is not important to their users; also called cost-to-benefit constraint.(p. 347)
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| Q) | The accounting principle that says when faced with two or more equally likely amounts, the least optimistic value should be selected. (p. 360)
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| R) | Current cost of purchasing an item. (p. 361)
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| S) | The selling price of merchandise inventory. (p. 366)
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| T) | The pricing of an inventory under the assumption that inventory items are sold in the order acquired; the first items received were the first items sold. (p. 352)
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| U) | One who receives and holds goods owned by another party for the purpose of selling the goods for the owner. (p. 347)
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| V) | The accounting requirement that a company use the same accounting methods period after period so that the financial statements of succeeding periods will be comparable. (p. 359)
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| W) | To count merchandise inventory for the purpose of reconciling goods actually on hand to the inventory control account in the General Ledger. (p. 347)
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