True or False

1- A firm that records its inventory using the First-in, First-out (FIFO) inventory costing method must report the ending value of its inventory at the higher of cost or market.

2- Restoration costs are not capitalized to the cost of a natural resource and must be expensed

3- A noncurrent asset is considered to be impaired if its carrying value is lower than its recoverable amount and must then be written down to its value in use.

4- The recoverable amount of a noncurrent asset is the higher of fair value less cost to sell and value in use.

5- Firms which record inventory using the Last-in, First-out inventory costing method should report the value of their ending inventory at the lower of cost or market.

6- Avoidable interest for interest capitalization purposes is the amount of interest the firm theoretically could have avoided if it hadnt constructed the asset

7- An increase in the allowance to reduce inventory account will also equal an increase in cost of goods sold.

8- If an accountant records an increase in the account recovery of losses to adjust the value of inventory, the allowance to reduce inventory account must be credited.

9- A firm is purchasing a timber deposit. The timber deposit will have a cost of $150,000. To prepare the timber deposit for use, the firm will have to develop the land and incur $100,000. The $100,000 cost of developing the land should be expensed since it is a development cost.

10- The allowance to reduce inventory to NRV or market account can only have a debit or credit balance, but the balance of the account can never be zero.