ACCT4

is tangible property held for sale in the normal course of business or used in producing goods or services for sale.

includes goods held for resale in the ordinary course of business.

includes items qcquired for the purpose of processing into finished goods.

includes goods in the process of being manufactured.

includes manufactured goods that are complete and ready for sale.

refers to the earnings of employees who work directly on the products being manufactured.

are manufacturing costs that are not raw material or direct labor costs.

refers to the sum of beginning inventory and purchases (or transfers to finished goods) for the period.

BI + P - EI = CGS

identifies the cost of the specific item that was sold.

assumes that the first goods purchased (the first in) are the first goods sold (the first out).

assumes that the most recently purchased units (the last in) are sold first (the first out).

uses the weighted average unit cost of the goods available for sale for both cost of goods sold and ending inventory.

is the current purchase price for identical goods.

is the expected sales price less selling costs (e.g., repair and disposal costs).

(LCM) is valuation method departing from the cost principle; it serves to recognize a loss when replacement cost or net realizable value drops below cost.

Cost of Goods Sold / Average Inventory

365 / Inventory Turnover = Average Days to Sell Inventory

are tangible and intangible resources owned by a business and used in its operations over serveral years.

(or fixed assets) have physical substance.

have special rights but not physical substance.

is the net cash equivalent amount paid or to be paid for the assets.

refers to interest expenditures included in the cost of a self-constructed asset.

are expenditures for normal operating upkeep of long-lived assets.

maintain the productive capacity of the asset during the current accounting period only and are recorded as expenses.

are infrequent expenditures that increase an asset's economic usefulness in the future.

Increase the productive life, operating effciency, or capacity of the asset and are recorded as increases in asset acounts, not as expenses.

is the process of allocating the cost of buildings and equipment over their productive lives using a systematic and rational method.

is the acquistion cost of an asset less accumulated depreciation.

is the expected service life of an asset to the present owner.

is the estimated amount to be recovered by the company at the end of the asset's estimated useful life.

are asets that occur in nature, such as mineral deposits, timber tracts, oil, and gas.

is the systematic and rational allocation of the cost of a natural resource over the period of its explotation.

is the systematic and rational allocation of the acquisition cost of an intangible asset over its useful life.

is the excess of the purchase price of a business over the fair value of the business's assets and liabilities.

is an exclusive legal right to use a special name, image, or slogan.

is the exclusive right to publish, use, and sell a literary, musical, or artistic work.

includes costs for computer software and Web development.

is granted by the federal government for an invention; it is an exclusive right given to the owner to use, manufacture, and sell the subject of the patent.

is a contractual right to sell certain products or services, use certain trademarks, or perform activities in a geographical region.

Net Sales (or Operating Revenues) / Average Net Fixed Assets.