FILL-IN-THE-BLANKPRINCIPLES AND TERMINOLOGY60%

INSTRUCTIONS: Complete each of the following statements by writing the appropriate words in the Answers column.

STATEMENTS	Answers
15. Inventory at the end of the current fiscal year was overstated. State whether each of the following will be overstated, understated, or not affected:
2. Gross profit reported on the income statement for the current year
3. Retained earnings reported on the balance sheet at the end of the current year
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 year
6. When merchandise is assumed to be sold are the last units purchased, the inventory method is called
7. This method uses the average unit cost for determining cost of merchandise sold and the ending merchandise inventory
8. During a period of consistently rising prices, the method (LIFO or FIFO) that will result in reporting the greater amount of net income is
9. True or False If the receiving report, purchase order, and vendors invoice agree, the inventory is recorded in the accounting records
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
11. The section of the balance sheet in which merchandise inventory is reported is
12. The inventory method in which the cost of the ending inventory is determined by taking a physical inventory is called.