Chapter 6 1. T F Aperiodic inventory system does not continually modify inventory amounts, but instead adjusts for purchases and sales of inventory at the end of the reporting period based on a physical count of inventory on hand. 2. T F Accountants often call FIFO the balance sheet approach because the amount it reports for ending inventory better approximates the current cost of inventory. . T F Under the perpetual inventory system, cost of goods sold is recorded at the time inventory is sold. 4. T F When the value of inventory falls below its cost, companies have the option of recording the inventory at cost or the lower market value 5. T F Generally, a lower gross profit reflects positively on a company's ability to manage its inventory 6. T F Overstating ending inventory in the current year causes net income in the current year to be overstated. 7. T F For inventory that is shipped FOB shipping point, title transfers from the seller to the buyer once the inventory begins shipment