True-False T F 1. Transactions that affect inventories on hand have an effect on both the balance sheet and the income statement. 2. Goods that have been purchased FOB destination but are in transit, should be excluded from a physical count of goods for the purchaser T F T F 3. Goods out on consignment should be included in the inventory of the company that has the goods on the floor. 4. Under a periodic inventory system, acquisition of inventory is debited to the Purchases F account. When management chooses an inventory costing method, the cost flow must follow the physical flow of the inventory 5. Multiple Choice 6. 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 costing method. D. whether or not it has been paid for 7. If goods in transit are shipped FOB destination A. the seller has legal title to the goods until they are delivered. B. the buyer has legal title to the goods until they are delivered C. the transportation company has legal title to the goods while they are in transit. D. no one has legal title to the goods until they are delivered. 8. Under a periodic inventory system, acquisition of merchandise is debited to A. Inventory. B. Cost of Goods Sold. C. Purchases D. Accounts Payable. The journal entry to record a return of merchandise purchased on account under a periodic inventory system would be 9. A. A/P Pur Returns xx B. Pur Returns xx A/P C. Inv A/P D. A/P Xx Inventory