accounting true/false?

1. As inventory is sold in many retail businesses, the largest expense

is created. T

2. The ending merchandise inventory for 2007 is the same as the

beginning merchandise inventory for 2008. T

3. The buyer will include the sales tax as part of the cost of

merchandise purchased.True if he can claim it back, false if he can't (I'm not familiar with your tax system)

4. In a multi-step income statement the dollar amount for income from

operations is always the same as net income. F

5. In many retail businesses, inventory is the largest current asset. T

6. A business using the perpetual inventory system, with its detailed

subsidiary records, does not need to take a physical inventory. F

7. If the perpetual inventory system is used and a physical count

disclosed a shortage, the cost of merchandise sold should be

debited and the merchandise inventory account credited. T

8. The use of the lower-of-cost-or-market method of inventory valuation

increases net income for the period in which the inventory

replacement price declined. F

9. During inflationary periods, the use of the FIFO method of costing

inventory will yield an inventory amount for the balance sheet

approximating the current replacement cost. T

10. Average inventory is computed by adding the inventory at the

beginning of the period to the inventory at the end of the period and

dividing by two. T

11. One negative effect of carrying too much inventory is risk that

customers will change their buying habits. T

12. Other income and expenses are items that are not related to the

primary operating activity. T

13. If ending inventory for the year is understated, net income for the

year is overstated. F

14. Transportation-in is considered a cost of purchasing inventory. T

15. The selection of an inventory costing method has no significant

impact on the financial statements. F