Reporting and Analyzing Inventory

Flashcards covering key vocabulary and concepts related to reporting and analyzing inventory.

Inventory Management

The process of ordering, storing, and using a company's inventory.

FOB Shipping Point

Ownership passes to the buyer when the public carrier accepts the goods from the seller.

Physical Inventory

Involves counting, weighing, or measuring each kind of inventory on hand.

LIFO Method

Last-In, First-Out; assumes that the latest goods purchased are the first to be sold.

FIFO Method

First-In, First-Out; assumes that the earliest goods purchased are the first to be sold.

Average-Cost Method

Allocates the cost of goods available for sale based on the weighted-average unit cost.

Net Realizable Value (NRV)

The net amount a company expects to realize from the sale of inventory.

Cost of Goods Sold (COGS)

The direct costs attributable to the production of the goods sold by a company.

Inventory Turnover Ratio

A measure of how many times inventory is sold and replaced over a period.

Lower-of-Cost-or-Net Realizable Value (LCNRV)

A method where inventory is written down to its net realizable value when it is less than cost.