Question

Question 8 (2 points) Merchandise inventory is a significant current liability for most merchandising companies. True False Question 9 (2 points) The method that requires a physical counting of the inventory is called the specific identification inventory method. True False Question 10 (2 points) Under lower of cost or market, market refers to current replacement cost. True False Question 11 (2 points) Under the perpetual inventory system a sales transaction requires two journal entries. True False Question 12 (2 points) Merchandise sold FOB destination that is in transit at year-end is owned by the seller and should be included in the seller's ending inventory. True False Question 13 (2 points) The specific identification method is most suitable to low volume and high priced units. True False

Answer 1

question	answer	remarks
8	False	It is classified as current inventory
9	True	Specific identification method physical counting of inventory
10	True
11	True	One entry to record sale, another to record reduction of inventory.
12	True	FOB selling point means the seller's responsibility towards goods shipped comes to an end only when the buyer takes their delivery at the location specified by the buyer.
13	True	Specific identification method is ideal to be used for low volume and high valued items.