Defining Chapter Terms Terms and phrases relating to concepts discussed in this chapter along with descriptions of those terms and phrases follow. Match each term, 1 through 15. with the best description a through a Key Inventory Terms and Phrases Key Inventory Terms and Phrases Description of Terms and Phrases 1. Net reliable value a Requires retroactive restatement of financial statements 2. Lower of-cost or market b. Method for valuing inventory applying to LIFO and retail methods 3. Allowance to reduce inventory to net realitable value c Cancellation of additional markup 4. Gross profit method d. Inventory estimation that is not acceptable under GAAP S.Estimated loss on purchase commitment e. Method that approximates lower-ofcost or market 6. Change in inventory method from average to FIFO f. Not usually practical to retroactively restate or adjust financial statements 7. Change from FIFO to LIFO Reduction in original sales price Markdown h. Selling price net of completion and disposal costs 9. Additional markup cancellation Theft of inventory that exceeds expectations 10. Retail inventory method Conventional Method Dollar amount required to purchase an inventory item 11. Abnormalcasualty los Recorded when contract price is greater than market price 12. Replacement cost 1. Requires net markups and markdowns in cost-to-retail percentage 11. Retail inventory methodAverage Method m. Adjusted in accounting records in the period discovered 14. Materialer n. Allows for estimation of inventory values when multiple tumi are purchased at one price 15. Relative sales al method Continentury account . 0