Which one of the following statements is true?

1.When the terms of sale are FOB shipping point, the seller is responsible for any damages to the goods during shipping.

2.When returned merchandise is defective, the seller's sales account is debited.

3.The first-in, first-out (FIFO) inventory cost method results in cost of goods sold valued at the most recent cost.

4.In periods of falling prices, FIFO will result in a higher ending inventory valuation than the average cost formula.

5.None of the above is true.