S5-11. Inventory principles and terminology (Learning Objectives 7, 4, Match the accounting terms on the left with the corresponding definitions on the right. 1. Conservatism a. Assigns the most recent inventory costs to ending 2. Full disclosure inventory b. Results in cost of goods sold that falls between what 3. LIFO FIFO and LIFO produce assuming rising prices. 4. Average cost c. This principle is the basis for using lower-of-cost-or- 5. FIFO market rule. 6. Consistency d. Principle that prevents a company from using a differ- 7. Materiality ent inventory costing method each year. 8. Specific- e. Identifies exactly which inventory item was sold. Identification Usually used for unique inventory items. f. Requires that a company report enough information for outsiders to make decisions. g. Treats the most recentewest purchases as the first units sold. h. Principle that states significant items must conform to GAAP