A periodic inventory system does not continually modify inventory amounts 1 -13

and sales of inventory at the end of the reporting period based on a physical count of inventory on hand. 2. T F Accountants often call FIFO the balance sheet approach because the amount it reports for ending inventory better appraximates the current cost of inventory 3. T F Under the perpetual Inventory system, cost of goods sold is recorded at the time inventory Is sold. 4. T F When the value of inventory falls below its cost, companies have the option of recording the inventory at cost or the lower market value. 5. T F Generally, a lower gross profit ratio reflects positively on a company's ablility to manage its Inventory 6. T F Overstating ending inventory in the current year causes net income in the current year to be overstated. 7. T F For inventory that is shipped FOB shipping point, title transfers from the seller to the buyer ance the inventory begins shipment. 8. The largest expense on a retailer's income statement is typically: 1. Salaries and Wages 3. Income tax expense 2. Cost of Goods Sold 4. Depreciation expense 9. Baker Fine Foods has beginning inventory for the year of $12,000. During the year Baker purchases inventory for $150,000 and ends the year with $20,000 of inventory. What is Baker's COGS? 10. Davis Hardware Company uses a perpetual inventory system. How should Davis record the sale of merchandise costing $629 for $960 on account? Make the journal entryds) 11. Below is year-end information for Spitzer Inc. COGS Net sales $420,000 $800,000 $10,000 170,000 80,000 What is Spitzer's Gross Profit Operating expenses Income tax Expense 12. The practice of using the lower-of-cost-or-market to evaluate inventory reflects which of the following 3. Conservatism 4. Materiality 13. Under the principle of lower-of-cost-or-market, when a company has 10 items with a market value of accounting principles? 1. Neutrality 2. Matching principle 550 and a cost of $60, what is the adjusting entry