__1. When the stated rate is higher than the effective interest rate,

a. the note is exchanged at a discount.

b. the excess is amortized by debiting Notes Receivable and crediting the amount of interest income that is recognized.

c. the notes fair value is more than its face value.

d. the notes fair value is equal to its future value.

___2. Net realizable value of an inventory item is now strictly defined as

a. the estimated selling price of the item.

b. the estimated selling price less estimated costs to sell and complete the item.

c. the estimated selling price plus estimated costs to sell and complete the item.

d. the original cost price less estimated costs to sell and complete the item.

___3. The following information is available for Varden Inc. for last year:

Freight-in......................................................................................... $ 20,000

Purchase returns................................................................................... 62,000

Selling expenses................................................................................. 110,000

Ending inventory................................................................................ 310,000

4. Since it began operations ten years ago, Carp Corp. has been using the weighted average method of inventory valuation. Its 2020 ending inventory was $28,000, but it would have been $70,000 if FIFO had been used. Thus, if FIFO had been used, Carps income before income taxes would have been

a. $42,000 less over the ten-year period.

b. $42,000 greater over the ten-year period.

c. $42,000 greater in 2020.

d. $42,000 less in 2020.

___5. The 2020 financial statements of Bass Ltd. reported beginning inventory of $260,000, ending inventory of $290,000, and cost of goods sold of $1,300,000 for the year. To one decimal, Basss inventory turnover ratio for 2020 is

a. 0.2 times.

b. 4.5 times.

c. 4.7 times.

d. 5.0 times.