12. A company with an acid-test ratio of 0.1 is likely to face near-term liquidity problems.

True or False

13. A company's quick ratio is 0.25. This ratio indicates no potential for liquidity problems.

True or False

18. A sales discount is a cash discount from the buyers perspective.

True or False

27. If the shipping terms are FOB destination, then goods are included in the buyers inventory after arrival at the destination.

True or False

31. The physical flow and cost flow of goods does not have to be the same; the exception is when the specific identification method is used.

True or False

33. A company's total cost of inventory was $329,000 and its net realizable value is $307,000. Applying lower cost or market, the amount reported should be $329,000.

True or False

45. A company had the following purchases and sales during its first month of operations:

Date Activities Units Acquired at Cost Units Sold at Retail

January 1 Purchase 10 units @ $4.00 = $40.00

January 9 Sales 6 units @ $12.00

January 17 Purchase 8 units @ $5.50 = $44.00

January 27 Sales 7 units @ $12.00

Using the perpetual weighted average method, what is the value of cost of goods sold? (Round weighted average costs per unit to 2 decimal places.)

Multiple Choice

• $40.00.

• $59.00.

• $25.00.

• $24.00.

• $23.35.