9. What is the effect of freight-in on the cost-retail ratio when using the conventional retail method?

a. Increases the cost-retail ratio.

b. No effect on the cost-retail ratio.

c. Depends on the amount of the net markups.

d. Decreases the cost-retail ratio.

10. Plant assets may properly include

a. deposits on machinery not yet received.

b. idle equipment awaiting sale.

c. land held for possible use as a future plant site.

d. office building.

11. Which of the following is not a major characteristic of a plant asset?

a. Possesses physical substance

b. Acquired for resale

c. Acquired for use

d. Yields services over a number of years

12. The cost of land does not include

a. costs of grading, filling, draining, and clearing.

b. costs of removing old buildings.

c. costs of improvements with limited lives.

d. special assessments.