TRUE/FALSE :

1. Inventory methods such as FIFO and LIFO and Average Cost deal with the flow of specific items of inventory.

2. Inventory is reported at the LOWER of cost or market value.

3. If prices are rising, FIFO will result in lower taxes.

4. The Allowance Method for accounting for doubtful accounts reduces the usefulness of the Balance Sheet and Income Statement in comparison to the Direct Write-Off Method.

5. We capitalize improvements and expansions.