Qeestion 6 (6 Multiple-Choice 2.5 points each- fotal of 15 points). Inventories affect a only the balance sheet b. only the income statement C both the balance sheet and the income statement. d. neither the balance sheet nor the income statement a reported under the classification of Property, Plant, and Equipment on the balance sheet 2. Inventory is b. often reported as a miscellaneous expense on the income statement. C. reported as a current asset on the balance sheet. d. generally valued at the price for which the goods can be sold. The factor which determines whether or not goods should be included in a physical count of inventory is a. physical possession. b. legal title c management's judgment. d. whether or not the purchase price has been paid. 3. 4. In a perpetual inventory system, cost of goods sold is recorded a. on a monthly basis. b. on an annual basis. C. with each sale. d. on a daily basis. Beginning inventory plus the cost of goods purchased equals a. cost of goods sold. b. cost of goods available for sale. C. net purchases. d. total goods purchased, In a period of increasing prices, which inventory flow assumption will result in the lowest amount of income tax expense? a. FIFO b. LIFO C. Average Cost d. Income tax expense for the period will be the same under all assumptions. ne: Page 12 of 13