Question

Homework: Homework - Chapter 05 2 of 4 (1 complete) HW Score Score: 0 of 2 pts S5-11 (book/static) Match the accounting terms on the right with the corresponding definitions on the left. 1. Assigns the most recent inventory costs to ending inventory 2. Results in cost of goods sold that falls between what FIFO and LIFO produce, assuming rising prices 3. Principle that is the basis for using the lower-of-cost-or-market rule 4. Principle that prevents a company from using a different inventory costing method each year Identifies exactly which inventory item was sold; usually used for unique inventory items 6. Requires a company to report enough information for outsiders to make decisions 7. Treats the most recent/newest purchases as the first units sold 8. Principle that states significant items must conform to GAAP

Answer 1

1	Assigns the most recent inventory costs to ending inventory	FIFO
2	Results in cost of goods sold that falls between what FIFO and LIFO produce assuming rising prices	Average cost
3	This principle is the basis for using the lower of cost or market rule	Conservatism
4	Principal that prevents a company from using a different inventory costing method each year	Consistency
5	Identifies exactly which inventory item was sold usually used for unique inventory items	Specific identification
6	Requires that a company report enough info for outsiders to make decisions	Full disclosure
7	Treats the most recent/newest purchase as the first units sold	LIFO
8	Principle that states significant items must conform to GAAP	Materiality