Place an "X* in the blank box next to the best answer for each of the following statements or questions. 1. Which cost-flow assumption produces best matching between reverue and cost? FIFO LIFO Weighted Average Cost Specific Identification 2. In a period of rising prices, the inventory method which tends to give the highest reported COGS is: FIFO LIFO Weighted Average Cost Specific Identification 3. In a period of falling prices, which inventory method generally provides the lowest amount of net income? FIFO LIFO Weighted Average Cost Specific Identification 4. If the ending inventory for 2012 is overstated the effects of this crror on cost of goods sold for 2012 and retained earnings for 2012, respectively, are overstatement, understatement overstatement, no effect understatement, overstatement understatement, no effect 5. Use of the double-declining balance method: results in a decreasing charge to depreciation expense means salvage value is not deducted in computing the depreciation base means the book value should not be reduced below salvage value All of above 6. A change in estimate should result in restatement of prior period financial statements be handled in current period only be handled retroactively None of above 7. Other things being equal, under the allowance method for uncollectible accounts, the percentage-of-receivables approach produces: A better matching of expenses with revenues A more accurate estimate of current assets A more accurate estimate of current liabilities None of above 8. Compared to secured borrowing, one of the advantages of sales of receivables is that: It does not increase total liabilities substantially It increases total assets substantially It does not increase total expense substantially It increases total gains substantially 9. What is "recourse" as it relates to selling receivables? The obligation of the purchaser of the receivables to pay the seller if all of the receivables are collected The obligation of the purchaser of the receivables to pay the seller in case the debtor fails to pay The obligation of the seller of the receivables to pay the purchaser in case the debtor returns the product related to the sale The obligation of the seller of the receivables to pay the purchaser in case the debtor fails to pay 10. The rational of using declining balance or sum-of-the-years'-digits method is to over the life of the long-term assets, match revenues with relative constant total cash flows associated with long-term assets over the life of the long-term assets, match revenues with relative constant total depreciation expenses associated with long-term assets over the life of the long-term assets, match revenues with relative constant total costs associated with long-term assets None of the above