Question

Match the accounting terms on the left with the corresponding definitions on the right.
_____1. Conservatism
_____ 2. Full-disclosure
_____ 3. LIFO
_____ 4. Average cost
_____ 5. FIFO
_____ 6. Consistency
_____ 7. Materiality
_____ 8. Specific-Identification

a. Assigns the most recent inventory costs to ending inventory.
b. Results in cost of goods sold that falls between what FIFO and LIFO produce assuming rising prices.
c. This principle is the basis for using the lower-of-cost-or-market rule.
d. Principle that prevents a company from using a different inventory costing method each year.
e. Identifies exactly which inventory item was sold. Usually used for unique inventory items.
f. Requires that a company report enough information for outsiders to make decisions.
g. Treats the most recent/newest purchases as the first units sold.
h. Principle that states significant items must conform to GAAP.



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  • CreatedApril 29, 2014
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