Answer True or False

1. Like sale revenue, cost of goods sold represents an inflow of assets
2. With the periodic inventory system the inventory account is updated after each sale of purchase.
3. Under the periodic inventory system, a physical inventory must be taken at the end of the period to determine cost of goods sold.
4. Purchase returns and allowances is subtracted from cost of goods sold to determine net purchases.
5. The gross profit ratio is calculated as gross profit divided by net income.
6. Under FIFO the units in the ending inventory represent the oldest purchases.
7. Specific identification relies on matching unit costs with the actual units sold.
8. Under LIFO, the units in the ending inventory represent the most recent purchases.
9. Moving average is the name given to the use of an average cost method used with a periodic inventory system.
10. Assets are unexpired costs, and expenses are expired cost.