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Accounting II Arkansas FW Vocabulary (Unit 3 21-40) Special Procedures

Accounting II Arkansas FW Vocabulary (Unit 3 21-40) Special Procedures
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Fair Market Value
The estimated price at which an asset or service would pass from a willing seller to a willing buyer.
First In First Out (FIFO) Inventory Costing Method
Using the price of merchandise purchased first to calculate the cost of merchandise sold first.
Historical costs
all costs incurred by a business to operate, maintain, repair, replace, or construct.
Interest
an amount paid for the use of money for a period of time.
Interest expense
the interest accrued on money borrowed.
Interest rate of a note
the percentage of the principal that is paid for use of the money.
Inventory record
a form used during a periodic inventory to record information about each item of merchandise on hand.
Last-in, first-out inventory consting method (LIFO)
using the price of merchandise purchased last to calculate the cost of merchandise sold first.
Lower of cost or market inventory costing method
using the lower of cost or market price to calculate the cost of ending merchandise inventory.
Maturity date of a note
the date a note is due.
Maturity value
the amount that is due on the maturity date of a note.
Merchandise inventory turnover ratio
the number of times the average amount of merchandise inventory is sold during a specific period of time.
Modified accelerated cost recovery system
depreciation method required by the Internal Revenue Service to be used for income tax collection purposes for most plant assests placed in service after 1986.
Net 30
a form of trade credit which specifies payment is expected to be recieved in full 30 days after the goods are delivered.
Notes payable
promissory notes that a business issues to creditors.
Notes receivable
promissory notes that a business accepts from customers.
Periodic inventory
a merchandise inventory determined by counting, weighing, or measuring items of merchandise on hand.
Perpetual inventory
a merchandise inventory determined by keeping a continuous record of increases, decreases, and balance on hand.
Personal property
all property not classified as real property.
Plant asset record
an accounting form on which a business records information about each plant assset.