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Average Cost Formula
A method used for inventory valuation, determining the cost of goods sold and ending inventory by calculating the weighted average of all purchases and manufacturing costs.
Periodic Inventory System
An accounting system that updates the inventory balance once at the end of the accounting period, using physical counts and purchase records.
Physical Count
The process of manually counting and verifying the amounts of inventory a company physically has in its possession.
Ownership
The legal right to possess, use, and control a tangible or intangible item.
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