enter INSTRUCTIONS: Complete each of the following statements by writing the appropriate words in the Answers column For Scoring shift STATEMENTS Answers inventory ledgor 0. 0 The subsidiary ledger for the perpetual inventory system is callod the 1-5. Inventory at the end of the current fiscal year was overstated. State whether each of the following will be overstated, understated, or not affected: Cost of merchandise sold reported on the income statement for the current year 1. 2. Gross profit reported on the income statement for the current year Retained earnings reported on the balance sheet at the end of the current year.. 3. 4. Net income reported on the income statement for the current year 5. Current assets reported on the balance sheet at the end of the current 6. 7. year When merchandise is assumed to be sold are the last units purchased the inventory method is called The retail method of inventory value estimation that is useful for estimating the cost of inventory that has been destroyed depends on the relationship between cost and retail value is During a period of consistently rising prices, the method (LIFO or FIFO) that will result in reporting the greater amount of net income is 8. 9. The method of estimating the cost of inventory that uses records of the selling prices of the merchandise purchased is called 10. If the cost of an item of inventory is $75, the current replacement cost .. is $77, and the selling price is $125, the amount included in inventory according to the lower of cost or market concept, is The section of the balance sheet in which merchandise inventory is reported is. The inventory method in which the cost of the ending inventory is 10- 11. 12. determined by taking a physical inventory is called 12