AVERAGE COST METHOD is using a weighted average cost for items in inventory rather than actual cost for each specific item.
BUSINESS ENTITY PRINCIPLE is where the business is seen as an entity separate from its owner(s) that keeps and presents financial records and prepares the final accounts and financial statements. The accounting is kept for each entity as a whole (groups of companies must present consolidated accounts and consolidated financial statements).
YEAR-END is the end of an accounting period; usually a calendar year, but may be a fiscal year. Books are closed at year-end.
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