[MULTIPLE CHOICE. (2 % each) Choose the BEST answer A. To report a loss when there is a decrease in the future utility. B. To keep track of the market value of the inventory. c. To report a loss when there is a decrease in the future utility below the original Why are inventories stated at lower-of-cost and net realizable value? cost D. To permit future profits to be recognized 2. Which of the following variables is not considered when computing interest? A. Principal. B. Interest Rate. C. Assets. D. Time. If the beginning inventory for 2014 is overstated, the effects of this error on cost of goods sold for 2014, net income for 2014, and assets at December 31, 2015, respectively, are? 3. A. overstatement, understatement, overstatement. B. overstatement, understatement, no effect. C. understatement, overstatement, overstatement. D. understatement, overstatement, no effect 4. Under the retail inventory method, when comparing the cost approach to the conventional (LCM) approach, which of the following is correct for a company with markups and markdowns? A. COGS reported on the income statement will be higher under the cost approach B. Ending inventory reported on the balance sheet will be higher under the cost approach C. COGAS at cost will be higher under the cost approach D. COGAS at retail will be higher under the cost approach. S. Tom Davis wants to withdraw s20,000 (including principal) from an investment fund at the required initial investment at end of each year for five years. How should he compute his the beginning of the first year if the fund earns 10% compounded annually? a. $20,000 times the future value of a 5-year, 10% ordinary annuity of 1 . b $20,000 divided by the future value of a 5-year, 10% ordinary annuity of 1 . c. S20.000 times the present value ofa 5-year, 10% ordinary annuity of i d. $20,000 divided by the present value of a 5-year, 10% ordinary annuity of 1