8.1 Listed below are eight technical accounting terms introduced in this chapter. Retail method FIFO method Lower- of- cost- or- market Gross profit method LIFO method Specific identification Flow assumption Average- cost method Each of the following statements may ( or may not) describe one of these technical terms. For each statement, indicate the term described, or answer ? None? if the statement does not correctly describe any of the terms. a. A pattern of transferring unit costs from the Inventory account to the Cost of Goods Sold that may ( or may not) parallel the physical flow of merchandise. b. The only flow assumption in which all units of merchandise are assigned the same per- unit cost. c. The method used to record the cost of goods sold when each unit in the inventory is unique. d. The most conservative of the flow assumptions during a period of sustained inflation. e. The flow assumption that provides the most current valuation of inventory in the balance sheet. f. A technique for estimating the cost of goods sold and the ending inventory that is based on the relationship between cost and sales price during the current accounting period.
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