DIRECTIONS: Circle the letter of the answer/phrase that best answers the question or completes the sentence. An invoice has terms of 4/10;n/60. What is the approximate annual rate of interest? A. 4% B.10% C. 20% D. 24% E. 50% 1. 2. Trade discounts are shown A. by the buyer only. B. by the seller only. C. by both the buyer and the seller. D. by neither the buyer or the seller. E. on the income statement. 3. When prices are falling, which method of inventory valuation will be the most conservative? A. FIFO B. LIFO C. Lower of Cost or Market D. MACRS E. Weighted Average Which of the following is TRUE regarding the perpetual inventory system? A. The inventory account is correct only after adjusting entries B. Purchases is debited each time inventory is purchased C. A physical count is necessary at the end of each fiscal PERIOD D. Fewer journal entries would be needed than under the period inventory method. 4. ch time inventory is purchased or sold, the inventory account must be either debited or credited