TRUE OR FALSE

1. If opening inventory is overstated, net income is overstated.
2. For goods on consignment, the consignor includes the inventory on consignment.
3. Cost of goods available for sale is equal to Beginning Inventory + Purchases
4. If goods are free on board shipping point, the purchaser assumes legal title as soon as the goods leave the seller's warehouse.
5. The gross profit method should not be used for annual financial reporting.
6. A retail store has finished goods inventory as part of the production process.
7. With a periodic inventory system, cost of goods sold is recorded at the time of sale.
8. Raw materials is an inventory account related to the service industry.
9. The specific identification method of inventory valuation is theoretically the most correct way to allocate costs.
10. Inventory is held for resale in the normal course of business.
11. If ending inventory is understated, net income is understated.
12. With a periodic inventory system, inventory is adjusted at the end of the accounting period when a physical inventory count is taken.
13. Work-in-Process is an inventory account related to manufacturing.