For each statement, indicate whether the statement is True (T) or False (F). 1 mark for each statement.

1. With stable prices, inventory overstocking can shift income from one or more future periods to the current period.

2. A negative cash conversion cycle indicates that it takes a company longer to pay suppliers/bills than sell inventory and collect money.

3. A seller, acting as an agent for another company by selling the companys goods on consignment, recognises the gross amount of the sale as revenue.

4.

Big Tech Corporation recorded pretax restructuring charges of $981.8 million during the year. The charges consisted of asset write-downs of $647 million, costs associated with exit or disposal activities of $94 million, and employee severance costs of $240.8 million. The company paid $103 million cash to settle these restructuring charges during the year. At year-end, the restructuring accrual associated with these charges was $231.8 million.

5. Other things being equal, an underestimated allowance for doubtful accounts in the current period decreases gross profit margin in the same period.