True or False

1. If both purchases and ending inventory are overstated by the same amount, net income is not affected

2. When using a perpetual inventory system, freight charges on goods purchased are debited to Freight-In.

3. Purchase Discounts Lost is a financial expense and is reported in the other income and expense section of the income statement

4. A trade discount that is granted as an incentive for a first-time customer or as a reward for large order should be accounted for by the purchaser as revenue

5. The International Accounting Standards Board (IASB) requires a specific identification method of inventory costing where individual items of inventory can be identified and costed

6. The cost flow assumption adopted must be consistent with the physical movement of the goods.

7. Goods in transit, shipped FOB shipping point, are included in the buyers statement of financial position at the time of delivery to the common carrier.

8. If a supplier ships goods f.o.b. destination, the title passes to the buyer when the supplier delivers the goods to the common carrier.

9. Freight charges on goods purchased are considered a period cost and therefore are not part of the cost of the inventory

10. IFRS requires manufacturers to disclose their inventory components on the statement of financial position or in related notes