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Definition of Work-in-process inventory
inventory that has been partially converted through the
a valuation method that uses actual direct
the amount of overhead that has been assigned to work in process inventory as a result of productive activity; credits for this amount are to an overhead account
a source document that provides virtually
a source document that indicates
a valuation method that uses actual
A secured loan that gives the lender a lien against all the borrower's inventories.
The time that elapses between receipt of payment from a customer and the
The average number of days' worth of sales that is held in inventory.
A conception of the way a stock's price changes that assumes that the price takes on all
For companies: Raw materials, items available for sale or in the process of being made ready for
A secured short-term loan to purchase inventory. The three basic forms are a blanket
The ratio of annual sales to average inventory which measures the speed that inventory
Refers to the time it takes the receiver of a check to process the payment and
Systems that schedule materials/inventory to arrive exactly as they are
Current assets minus current liabilities. Often simply referred to as working capital.
Price discovery process
The process of determining the prices of the assets in the marketplace through the
Defined as the difference in current assets and current liabilities (excluding short-term
Working capital management
The management of current assets and current liabilities to maximize shortterm liquidity.
Working capital ratio
working capital expressed as a percentage of sales.
Informal arrangement between a borrower and creditors.
Realignment period of a temporary misaligned yield relationship that sometimes occurs in
The number of times a company sold out and replaced its average stock of goods in a year. The formula is:
The value of the products that a retailing or wholesaling company intends to resell for a profit.
Goods bought or manufactured for resale but as yet unsold, comprising raw materials, work-in-progress and finished goods.
A method of costing for continuous manufacture in which costs for an accounting compared are compared with production for the same period to determine a cost per unit produced.
Current assets less current liabilities. Money that revolves in the business as part of the process of buying, making and selling goods and services, particularly in relation to debtors, creditors, inventory and bank.
Goods or services that have commenced the production process but are incomplete and unable to be sold.
The cost of the goods that a company has available for resale.
Periodic inventory system
An inventory system in which the balance in the inventory account is adjusted for the units sold only at the end of the period.
Perpetual inventory system
An inventory system in which the balance in the inventory account is adjusted for the units sold each time a sale is made.
A term describing the loss of products from inventory
inventory turnover ratio
The cost-of-goods-sold expense for a given
Refers to making an entry, usually at the close of a
Inventory Turnover Ratio
Provides a measure of how often a company's inventory is sold or
business process reengineering (BPR)
the process of combining information technology to create new and more effective
cost-benefit analysis the analytical process of comparing the
relative costs and benefits that result from a specific course
dollar days (of inventory)
a measurement of the value of inventory for the time that inventory is held
when the incremental revenue from the sale of reworked defective units is greater than
FIFO method (of process costing)
the method of cost assignment that computes an average cost per equivalent
a manufacturing process that simultaneously
modified FIFO method (of process costing)
the method of cost assignment that uses FIFO to compute a cost per
the ability of a worker to monitor
a flexible organization structure that
benchmarking that focuses on practices and how the best-in-class companies achieved their results
an assessment about the number of processes through which a product flows
process costing system
a method of accumulating and assigning costs to units of production in companies producing large quantities of homogeneous products;
the actual time consumed performing the
a flowchart or diagram indicating every step
the total units produced during a period
process quality yield
the proportion of good units that resulted from the activities expended
product- (or process-) level cost
a cost that is caused by the development, production, or acquisition of specific products or services
statistical process control (SPC)
the use of control techniques that are based on the theory that a process has natural variations in it over time, but uncommon variations
strict FIFO method (of process costing)
the method of cost assignment that uses FIFO to compute a cost per equivalent unit and, in transferring units from a department, keeps the
a streamlined system of inventory
weighted average method (of process costing)
the method of cost assignment that computes an average cost per
total current assets minus total current liabilities
Statistical assumptions about the behavior of security prices. For
The beginning inventory for a period, plus the amount at the end of
The amount of money invested in inventory, as per a company’s
Finished goods inventory
Goods that have been completed by the manufacturing
Moving average inventory method
An inventory costing methodology that calls for the re-calculation of the average cost of all parts in stock after every purchase.
A system that continually tracks all additions to and deletions
A series of linked activities that result in a specific objective. For example, the
A costing methodology that arrives at an individual product cost through the calculation of average costs for large quantities of identical products.
Raw materials inventory
The total cost of all component parts currently in stock that
Refers to a product that does not meet a company’s minimum quality standards,
The amount of a company’s current assets minus its current liabilities;
net working capital
Current assets minus current liabilities.
Agreement between a company and its creditors establishing the steps the company must take to avoid bankruptcy.
An unemployed person who gives up looking for work and so is no longer counted as in the labor force.
Goods that a firm stores in anticipation of its later sale or use as an input.
A project, such as digging holes and filling them up again, that has no useful purpose other than to make work.
Contract Work Hours and Safety Standards Act
A federal Act requiring federal contractors to pay overtime for hours worked exceeding 40 per week.
Personal Responsibility and Work Opportunity Reconciliation Act
A federal Act requiring the reporting of new hires into a national database.
A fixed period of 168 consecutive hours that recurs on a consistent basis.
Workers' Compensation Benefits
Employer-paid insurance that provides their employees with wage compensation if they are injured on the job.
Average-Cost Inventory Method
The inventory cost-flow assumption that assigns the average
First-In, First-Out (FIFO) Inventory Method
The inventory cost-flow assumption that
The cost of unsold goods that are held for sale in the ordinary course of business or
The number of days it would take to sell the ending balance in inventory at the
A shortfall between inventory based on actual physical counts and inventory
Last-In, First-Out (LIFO) Inventory Method
The inventory cost-flow assumption that assigns the most recent inventory acquisition costs to cost of goods sold. The earliest inventory
Purchased In-Process Research and Development
Unfinished research and development that is acquired from another firm.
Current assets minus current liabilities
ABC inventory classification
A method for dividing inventory into classifications,
inventory intended for shipment to customers, usually
The dollar value or unit total of goods on hand at the end of an
Finished goods inventory
Completed inventory items ready for shipment to
Excess inventory kept on hand to provide a buffer against
Excess inventories kept on hand as a buffer against contingent
Parts with no recent prior or forecasted usage.
inventory currently situated between its shipment and delivery
Those items included categorized as either raw materials, work-inprocess,
A transaction used to adjust the book balance of an inventory
The redirection of parts or finished goods away from their intended
A transaction used to record the reduction in inventory from a location,
The arrival of an inventory delivery from a supplier or other
inventory returned from a customer for any reason. This receipt
The number of times per year that an entire inventory or a
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