Question

Match the term that best matches each of the definitions or concepts that follow.
Each term can be used only once.

1. Periodic inventory system.
2. Dollar-value LIFO
3. Perpetual inventory system
4. FIFO
5. LIFO
6. F.O.B. Shipping Point
7. F.O.B. Destination
8. Average Cost
9. Consignment
10. LIFO conformity rule

Match each of the options above to the items below.

• Assumes ending inventory includes items most recently purchased.

  Assumes ending inventory includes items most recently purchased. Open choices for matching

• Continuously records changes in inventory.

  Continuously records changes in inventory. Open choices for matching

• Inventory is viewed as a quantity of value.

  Inventory is viewed as a quantity of value. Open choices for matching

• Legal title passes when goods arrive at customer location.

  Legal title passes when goods arrive at customer location. Open choices for matching

• Assumes items sold come from a mixture of goods acquired during the period.

  Assumes items sold come from a mixture of goods acquired during the period. Open choices for matching

• Assumes cost of goods sold includes items most recently purchased.

  Assumes cost of goods sold includes items most recently purchased. Open choices for matching

• Legal title passes when goods are transferred to transporter.

  Legal title passes when goods are transferred to transporter. Open choices for matching

• Adjusts inventory at end of the period.

  Adjusts inventory at end of the period. Open choices for matching

• LIFO must be used for financial reporting if used for income tax purposes.

  LIFO must be used for financial reporting if used for income tax purposes. Open choices for matching

• Goods are transferred to another company but title remains with transferor.

Answer 1

1. Assumes ending inventory includes items most recently purchased
FIFO
Since in FIFO, goods purchased first are sold first

2. Continuously records changes in inventory
Perpetual Inventory System

3. Inventory is viewed as a quantity of value
Dollar Value LIFO

4. Legal title passes when goods arrive at customer location
F.O.B. Destination

5. Assumes items sold come from a mixture of goods acquired during the period
Average Cost

6. Assumes cost of goods sold includes items most recently purchased
LIFO

7. Legal title passes when goods are transferred to transporter
F.O.B. Shipping

8. Adjusts inventory at end of the period
Periodic Inventory System

9. LIFO must be used for financial reporting if used for income tax purposes
LIFO Conformity rule

10. Goods are transferred to another company but title remains with transferor
Consignment