The following is a list of terms and definitions associated with inventory:
1. Perpetual inventory system
2. Periodic inventory system
3. LIFO costing method
4. FIFO costing method
5. Tax deferral
6. LIFO reserve
7. Counter-balancing error
8. Specific identification costing method
9. Lower-of cost or market rule
10. Gross profit method
a. Updates the inventory account only at the end of an accounting period.
b. Calculates the cost of goods sold based on the assumption that the first unit of inventory available for sale is the first unit sold.
c. Determines the cost of goods sold based on the actual cost of each inventory item sold.
d. Updates the inventory account each time inventory is bought or sold.
e. A method of estimating inventory using a company's gross profit percentage.
f. Calculates the cost of goods sold based on the assumption that the last unit of inventory available for sale is the first one sold.
g. A temporary delay in the payment of income taxes.
h. The difference between the LIFO inventory reported on the balance sheet and what inventory would be if reported on a FIFO basis.
i. Requires inventory to be reported at its market value if market value is lower than the inventory's cost.
j. An error whose effect on net in-come is corrected in the period after the error.
Required
Match each term with the appropriate definition.