1)Under the allowance method, when an account is written off, total assets decrease

True

False

2)In a period of rising prices LIFO produces the highest cost of goods sold and the lowest gross profit.

True

False

3)Which of the following characteristics is not common to both tangible and intangible assets?

Have an expected life of more than one year

May have value only to a particular company

Held for use and not for investment

Derive value from the ability to generate revenue

4)Software development costs are treated as R&D expense until technological feasibility of the product is established.

True

False

5)The use of inventory pools with dollar-value LIFO overcomes the issues associated with keeping numerous detailed records of individual quantities of each item.

True

False

6)A company's liquidation of inventory under LIFO results in higher income during periods of rising costs. Therefore, management can manipulate earnings by delaying purchases until after the end of the fiscal year.

True

False

7)Legal work in connection with patent applications or litigation, and the sale or licensing of patents is excluded from R & D.

True

False