ry accounting method is preferred? A) FIFO B) Weighted average C) LIFO D) Profitability ratios are not affected by the inventory accounting method used 14. Which is an appropriate method of preparing a common-size cash flow statement? A)Begin with net income and show the items that reconcile net income and operating cash flows ow each line item on the cash flow statement as a percentage of net revenue c) Show each line item on the cash flow statement as a percentage of total cash outflows 15. Under last in first n, when a firm sells a greater quantity of its inventory than it produces or acquires, the result is: A) lower earnings B) increase in accounts receivable C) an overstatement of the cost of goods sold D) a decrease in the LIFO reserve 16. Beta Co. has a loan covenant requiring it to maintain a current ratio of 1.5 or better. As Beta approaches illion in cash, $9 million in accounts receivable and $10 year-end, current assets are $20 million ($1 million in inventory) and current liabilities are $13.5 million. Which of the following transactions would Beta Co. most likely enter to meet its loan covenant? A) Sell $1 million in inventory and deposit the proceeds in the company's checking account B) Borrow $1 million short term and deposit the funds in their checking account C) Sell $1 million in inventory and pay off some of its short term creditors