Match the accounting terms on the right with the corresponding definitions on th

Question

Match the accounting terms on the right with the corresponding definitions on the left. 1. Assigns the most recent inventory costs to ending inventory a. Conservatism b. Full-disclosure c. LIFO d. Average cost 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 e. FIFO method each year f. Consistency 5, Identfifes exacily which inventory item was sold: usully used for unique . Materiality inventory items h. Specific-Identification 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

Explanation / Answer

Answers Statement no. e. FIFO 1 d. Average Price 2 a. Conservatism 3 f. Consistency 4 h. Specific Identification 5 b. Full Disclosure 6 c. LIFO 7 g. Materiality 8

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