7 An inventory method which is designed to approximale inventory valuation at th

Question

7 An inventory method which is designed to approximale inventory valuation at the ower of cost or market is a, last-in, first-out b. first-in, first-out c. conventional retail method. d. specific idervitication. 8. When calculating the cost ratio for the retail inventory method a. it it is the conventional method, the beginning inventory is included and markdowns b. it it is the LIFO method, the beginning inventory is excluded and markdowns are c. it it is the LIFO method, the beginning inventory is included and markdowns are not are deducted deducted d. if it is the conventional method, the beginning inventory is excluded and markdowns are not deducted. 9. What is the effect of freight-in on the cost-retail ratio when using the conventional retail method? a, Increases the cost-retail ratio. b. No ettect on the cost retail ratio. c. Depends on the amount of the net markups d. Decreases the cost-retail ratio. 10. Plant assets may properly include a. deposits on machinery not yet received. b. idle equipment awaiting sale c. land held for possible use as a future plant site d. office building 11. Which of the following is not a major characteristic of a plant asset? a. Possesses physical substance b. Acquired for resale C. Acquired for use d. Yields services over a number of years The cost of land does not include a. costs of grading, filling, draining, and clearing b. costs of removing old buildings. c. costs of improvements with limited lives. d. special assessments 12. 13. Fences and parking lots are reported on the balance sheet as a. current assets. b. land improvements. c. land. d. property and equipment. assets under construction for a company's own use b. assets that ar c. assets tha d. All of the 14. Assets that qualify for interest cost capitalization include e ready for their intended use in the earnings of the company. t are not currently being used because of exces se assets qualify for interest cost capitalization.

Explanation / Answer

Solution:-

7. c. conventional retail method.

8. b. if it is the LIFO method, the beginning inventory is excluded and markdowns are deducted.

9. a. Increases the cost-retail ratio.

10. d. Office building.

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