When there are circumstances that make it difficult to count and determine inventory value a company may estimate its ending inventory by using either of two methods:

	Allowance method or direct write-down method
	Doubtful accounts or bad debts
	Gross profit method or dollar value method
	Gross profit method or retail inventory method

The gross profit method of estimating ending inventory uses the concepts of markups and markdowns in calculating inventory value.

	True
	False

GAAP requires companies to write down their inventory if the cost of the inventory exceeds the current value of the inventory so that the company reports are relevant and representationally faithful for inventory value.

	True
	False

In the inventory valuation method of lower of cost or market rule the floor constraint is

options:

	net realizable value minus a normal profit margin
	net realizable value plus a normal profit margin
	completion of cost added to selling price
	net realizable value