Chapter 6 Merchandise Inventory

Physical counts of inventory a are not necessary

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76. Physical counts of inventory: A. Are not necessary under the perpetual system. B. Are necessary to measure and adjust for inventory shrinkage. C. Must be taken at least once a month. D. Requires the use of hand-held portable computers. E. Are not necessary under the cost-to benefit constraint. 77. Incidental and necessary costs of inventory: 78. During a period of steadily rising costs, the inventory valuation method that yields the lowest reported net income is: 79. The inventory aluation method that tends to smooth out erratic changes in costs is:
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80. The inventory valuation method that has the advantages of assigning an amount to inventory on the balance sheet that approximates its current cost, and also mimics the actual flow of goods for most businesses is: A. FIFO. B. Weighted average. C. LIFO. D. Specific identification. E. All of these. 81. The inventory valuation method that results in the lowest taxable income in a period of inflation is: 82. The consistency concept: 83. The full disclosure principle:
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