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CHAPTER 9INVENTORIES: ADDITIONAL VALUATION ISSUESIFRS questions are available at the end of this chapter.TRUE-FALSE—ConceptualAnswerNo.DescriptionT1.When to use lower-of-cost-or-market.F2.Lower-of-cost-or-market and conservatism.F3.Purpose of the “floor” in LCM.T4.Lower-of-cost-or-market and consistency.F5.Reporting inventory at net realizable value.T6.Valuing inventory at net realizable value.T7.Valuation using relative sales value.F8.Definition of a basket purchase.F9.Recording purchase commitments.T10.Loss on purchase commitments. F11.Recording noncancelable purchase contract.T12.Gross profit method.F13.Gross profit percentage.T14.Disadvantage of gross profit method.F15.Conventional retail method.F16.Definition of markup.T17.Accounting for abnormal shortages.F18.Computing inventory turnover ratio.T19.Average days to sell inventory.T20LIFO retail method.MULTIPLE CHOICE—ConceptualAnswerNo.Descriptiond21.Knowledge of lower-of-cost-or-market valuations.d22.Appropriate use of LCM valuation.c23.Definition of "market" under LCM.b24.Definition of "ceiling."a25.Definition of "designated market value."c26.Application of lower-of-cost-or-market valuation.d27.Effect of inventory write-down.dS28.Recording inventory loss under direct method.a29.Lower-of-cost-or-market description.b30.Definition of "floor".d31.Rationale of the "ceiling".c32.Reason inventories are stated at LCM.a33.Acceptable approaches in applying LCM.d34.Methods used to record inventory loss.a35.Reason for reporting inventory at sales price.cS36.Recording inventory at net realizable value.