flow of costs and units in most manufacturing situations? 12) When
using the periodic inventory system, which of the following generally
would NOT be separately accounted for in the computation of cost of
goods sold? 13) An item of inventory purchased this period for $15.00
has been incorrectly written down to its current replacement cost of
$10.00. It sells during the following period for $30.00, its normal selling
price, with disposal costs of $3.00 and normal profit of $12.00. Which of
the following statements is NOT true? 14) Designated market value 15)
In no case can "market" in the lower-of-cost-or-market rule be more than
16) A major advantage of the retail inventory method is that it 17) The
gross profit method of inventory valuation is invalid when 18) The retail
inventory method is based on the assumption that the 19) Which of the
following is NOT a major characteristic of a plant asset? 20) Cotton
Hotel Corporation recently purchased Holiday Hotel and the land on
which it is located with the plan to tear down the Holiday Hotel and
build a new luxury hotel on the site. The cost of the Holiday Hotel
should be 21) If a corporation purchases a lot and building and
subsequently tears down the building and uses the property as a parking
lot, the proper accounting treatment of the cost of the building would
depend on 22) The period of time during which interest must be
capitalized ends when 23) To be consistent with the historical cost
principle, overhead costs incurred by an enterprise constructing its own
building should be 24) When computing the amount of interest cost to
be capitalized, the concept of "avoidable interest" refers to 25) The
King-Kong Corporation exchanges one plant asset for a similar plant
asset and gives cash in the exchange. The exchange is NOT expected to
cause a material change in the future cash flows for either entity. If a
gain on the disposal of the old asset is indicated, the gain will 26) When
funds are borrowed to pay for construction of assets that qualify for
capitalization of interest, the excess funds NOT needed to pay for
construction may be temporarily invested in interest-bearing securities.
Interest earned on these temporary investments should be 27) Which of
the following is NOT a condition that must be satisfied before interest
capitalization can begin on a qualifying asset? 28) Which of the
following most accurately reflects the concept of depreciation as used in