10. Which of the following statements regarding inventory is (are) true?

1. I. For a merchandising company, the cost of goods available for sale minus the cost of goods sold will equal ending inventory.
2. II. The LIFO inventory cost flow assumption is preferable to FIFO for a company wishing to maximize profits during a period of declining costs.
3. III. A company that ships finished goods FOB destination will keep the inventory in its accounting records up until the point that the goods are delivered to a common carrier acting as an agent for the buyer.

Top of Form

• II and III only.
• I and II only.
• I and III only.
• I, II, and III.