1 Using accounting vocabulary [5 min] Match the accounting terms with the corresponding definitions. 1. Specific identification 2. Materiality concept 3. Last-in, first-out (LIFO) 4. Conservatism 5. Comparability principle 6. Average cost 7. Relevance principle 8. First-in, first-out (FIFO) 9. Treats the oldest inventory purchases as the first units sold. 10. Requires that a company report information to outsiders that is useful for their decision making. 11. Identifies exactly which inventory item was sold. Usually used for higher-cost inventory. 12. Calculates a weighted-average cost based on the cost of goods available for sale and the number of units available. 13. Principle whose foundation is to exercise caution in reporting financial statement items. 14. Treats the most recent/newest purchases as the first units sold. 15. Businesses should use the same accounting methods from period to period. 16. Principle that states significant items must conform to GAAP Answers: (15 min) 1. 2. 3. 4. 5. 6. 7. 8