1. To determine cost of goods available for sale under the retail method of estimating inventory Freight-In is a. Added to the purchases amount in the cost column b. Added to the purchases amount in the retail column c. Deducted from the purchases amount in the cost column d. Deducted from the purchases amount in the retail column 2. A company would not be permitted to apply lower-of-cost-or-market to a. Its entire inventory as a whole b. Individual items in inventory c. Groups of items that fall in a single category a. Items on consignment from another company 3. Which of the following statements about inventory is correct? a. For companies that use LIFO, inventory is valued at lower of cost or net realizable value at the end of the reporting period. b. The primary motivation behind the lower-of-cost-or-market rule is the principle of conservatism C. Net realizable value is selling price plus costs of selling such as transportation and processing fees d. Any inventory written down due to lower of cost or net realizable value must be written back up if net realizable value increases 4. The dollar-value LIFO retail method is used a. By applying the gross profit percentage to the net sales amount 6. To eliminate the effect of price changes in the ending inventory value t. When the average cost method is used to account for a company's inventory flow d. When retail prices of inventory remain stable during the period 5. A company that uses the period inventory system miscounts its ending inventory on December 31, 2018. The count results in ending inventory of $162,500, yet the actual ending inventory is $158,700. Which errors result on the financial statements? a. Cost of goods sold is overstated and retained earnings is overstated Cb? Cost of goods sold is overstated and retained earnings is understated C. Cost of goods sold is understated and retained earnings is overstated d. Cost of goods sold is understated and retained earnings is understated