The average cost method is one of the three inventory valuation methods, and the other two common methods are first in, first out (FIFO) and last in, first out (LIFO).
The average cost method uses the weighted average of all inventory purchased in a period to determine the cost of goods sold (COGS) as well as the cost of goods still available for sale.
Once a company chooses an inventory valuation method, it must remain consistent in its use in order to comply with generally accepted accounting principles (GAAP).
Accountability is the acceptance of responsibility for one’s actions. This implies a willingness to be transparent, allowing others to observe and evaluate their work.
Accounting policies are the procedures a company uses to prepare financial statements. Unlike accounting principles, which are rules, accounting policies are the standard for following those rules.
Acquisition accounting is a set of formal guidelines describing how the acquirer should report the assets, liabilities, non-controlling interests and goodwill of the acquired company.
Performance Based Management (ABM) is a means of analyzing a company’s profitability by looking at every aspect of its business to determine its strengths and weaknesses.