ACC 304 All Assignments ACC 304 All Assignments | Page 106

17. In the retail inventory method, abnormal shortages are
deducted from both the cost and retail amounts and reported as a loss.
18. The inventory turnover ratio is computed by dividing the cost of
goods sold by the ending inventory on hand.
19. The average days to sell inventory represents the average
number of days’ sales for which a company has inventory on hand.
*20. The LIFO retail method assumes that markups and markdowns
apply only to the goods purchased during the period.
True False Answers—Conceptual
MULTIPLE CHOICE—Conceptual
21.
Which of the following is true about lower-of-cost-or-market?
a. It is inconsistent because losses are recognized but not gains.