1. Company X uses the lower-of-cost-or-net realizable value to value its inventory. The book value of inventory was $10,000. The net realizable value is $12,000. What value should the company record its inventory at in its books? (This question is a freebie and no, it is not a trick question).

$11,000

$10,000

$12,000

It depends

2.

Which of the following is true?

If terms state FOB shipping point, then the buyer pays freight costs

If terms state FOB shipping point, then the ownership of the goods remains with the seller until the goods reach the buyer

Both statements are false

Both statements are true