138. Match the following terms with the appropriate definition. 1. A procedure for estimating inventory where the past gross profit rate is used to estimate the cost of goods sold, which is then...

1. A procedure for estimating inventory where the past gross profit rate is used to estimate the cost of goods sold, which is then subtracted from the cost of goods available for sale to determine the estimated ending inventory

Lower of cost or market

2. The principle that aims to select the less optimistic estimate when two or more estimates are about equally likely

Consignee

3. The accounting principle that says a company uses the same accounting methods period after period so that the financial statements of succeeding periods will be comparable

Conservatism principle

4. An estimate of days needed to convert the inventory available at the end of the period into receivables or cash

Consistency principle

5. An owner of goods who ships them to another party who will then sell the goods for the owner

Gross profit method

6. One who receives and holds goods owned by another for purposes of selling the goods for the owner

Consignor

7. The method of assigning costs to inventory where the purchase cost of each item in inventory is identified and used to determine the cost of inventory

Specific identification method

8. The required method of reporting inventory at market when market is lower than cost

Days' sales in inventory

9. A method for estimating inventory based on the ratio of the amount of goods for sale at cost to the amount of goods for sale at retail prices

Inventory turnover

10. The number of times a company's average inventory is sold during an accounting period

Retail inventory method