12. Which of the following variations of the retail inventory method would generally result in the lowest cost-to-retail ratio in a period of declining prices? a FIFO b. LIFO c. average cost d lower of average cost or market 13. Which of the following variations of the retail inventory method would generally result in the lowest cost-to-retail ratio in a period of rising prices? a FIFO b. LIFO c. average cost d. lower of average cost or market 14. What is the effect on net income if a company failed to record a purchase in transit (FOB shipping point) and also failed to include the purchase in physical inventory? Income is overstated. b. Income is understated. c. Income is correct. d. Not enough information is provided to determine the answer. 15. If purchases were recorded correctly but ending physical inventory is understated, which one of the llowing situations occurs for the current year? a. Working capital is understated and net income is overstated. b. Working capital and net income are understated. c. Working capital is overstated and net income is understated. d. Working capital and net income are overstated. 16. What is the effect on net income for calendar year 2020 if a company failed to record a purchase of material in transit (FOB shipping point) but included the materials in physical inventory as of December 31, 2020 a. Net income is overstated. b. Net income is understated. c. Net income is unaffected. d. Not enough information is provided to determine the