The conventional retail inventory method is based on:   Multiple Choice   Average cost.   LIFO cost.   Lower of average cost or market value.   Lower of LIFO cost or market value.

Which of the following regarding the lower of cost ormarket rule for inventory are true?(i) The lower of cost or market rule is an example of thehistorical cost principle.(ii) When the market value of inventory drops belowthe original cost of inventory shown in the financialrecords, net income is reduced.(iii) When the market value of inventory drops belowthe original cost of inventory shown in the financialrecords, total assets are reduced.a. (i) only c. (ii) and (iii)b. (ii) only d. All of the above

Differentiate between the specific identification, FIFO, LIFO, and average cost methods used to determine the cost of ending inventory and cost of goods sold.

Inventory cost flow assumptions address accounting issues except when a.identical units of merchandise are acquired at different unit costs during the period. b.an item is sold and it is necessary to determine its cost. c.both of these choices address inventory accounting issues. d.neither of these choices addresses inventory accounting issues.

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