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6 ) The advantage of relating a company ' s bad debt expense to its outstanding accounts receivable is that this approach 7 ) The failure to record a purchase of mer ¬ chandise on account even though the goods are properly included in the physical inven ¬ tory results in 8 ) Belle Co . received merchandise on consignment . As of March 31 , Belle had recorded the transaction as a purchase and included the goods in inventory . The effect of this on its financial statements for March 31 9 ) Eller Co . received merchandise on consignment . As of January 31 , Eller included the goods in inventory , but did NOT record the transaction . The effect of this on its financial statements for January 31 10 ) The use of a Purchase Discounts account implies that the recorded cost of a purchased inventory item is its 11 ) Which method of inventory pricing best approximates specific identification of the actual 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