24. In an inflationary environment, which inventory cost flow assumption would produce the lowest net income? A. Specific identification. B. Weighted average. C. FIFO D. LIFO 25. The weighted average method of inventory valuation will always result in an amount between the FIFO and LIFO valuation. A. True. B. False 26. Closing entries for merchandising companies are similar to those for a service companies. A. True. B. False. 27. Ending inventory for the current year is understated by $10,000. What effect will this error have on cost of merchandise sold and net income. A. B. C. D. Understated Understated Overstated Overstated Overstated Understated Understated Overstated 28. In applying the lower of cost or market method to inventory valuation, market is defined as Net Realizable Value. A. True. B. False. 29. It can be expected that a car dealership will have a higher "inventory turnover" than Wal-Mart A. True. B. False. 30. It can be expected that a company selling perishable goods will have a lower "number of days' sales in inventory" than a company selling nonperishable goods. A. True. B. False