16 Which of the following inventory cost flow assumptions causes the value of ending inventory to most accurately reflect the most recently purchased inventory? FIFO Specific Identification LIFO Average Cost Question 17 2 pts 2 pts Mike's Sporting Goods' gross profit margin decreased from 34.0% in 2019 to 31.3% in 2020. What are two possible causes for the decline in gross profit? Decreased competition resulted in a higher selling price in 2020 and Mike increased their mark up in 2020. Decreased competition resulted in a higher selling price in 2020 and the cost of inventory from suppliers decreased in 2020. Increased competition resulted in a lower selling price in 2020 and the cost of inventory from suppliers decreased in 2020. Increased competition resulted in lower selling price in 2020 and the cost of inventory from suppliers increased in 2020. Question 18 2 pts Bob Corporation has 300 widgets in ending inventory that originally cost the company $20 each. Currently, the widgets have a net realizable value of only $10 each. Bob neglects to apply the lower of cost or net realizable value to the units in his ending inventory. What impact will this have on Bob's balance sheet and income statement at year end? Assets will be overstated by $3,000 and net income will be overstated by $3,000. Assets will be understated by $3,000 and net income will be understated by $3,000. Assets will be understated by $3,000 and net income will be overstated by $3,000. Assets will be overstated by $3,000 and net income will be understated by $3,000. Question 19 2 pts Malloy Company purchased a building in December 2019. The company plans to use this building for the next 15 years. If Malloy expensed the entire cost of the building in December 2019, Assets and Net Income would be properly stated. O2019 Net Income would be understated. O Total Assets would be overstated. 2019 Net Income would be overstated. Question 20 2 pts The managers of ABC Company receive performance bonuses based on the company's net income. Which inventory costing method are the managers likely to favor in periods of rising prices? Specific Identification FIFO Average Cost O LIFO Question 21 Which of the following may impact a company's credit policy? 1. Increased competition forces the company to increase sales. 2. In a good economy the risk of non-payment by customers is lower. 3. Cost of extending credit decreases as the economy deteriorates. O 1, 2, and 3. O 2 and 3 O 1 and 3 1 and 2 2 pts