4. ____ 5. Merchandise in transit should not be included in the sellers inventory if the terms are FOB 6. The inventory method where the last units purchased are assumed to be sold and the ending inventory is made up of the first units purchased. 7. A method that is useful for estimating the cost of inventory that has been destroyed that uses the relationship between cost and retail value is 8. During a period of consistently falling prices the method (FIFO or LIFO) that will result in reporting the greater cost of merchandise sold is 911. Inventory at the end of the current fiscal year was understated. Statewhether each of the following will be overstated understated or not affected: 9. Cost of merchandise sold reported on the income statement for thecurrent year 10. Net income reported on the income statement for the current year 11. Retained earnings reported on the balance sheet at the end of the current year 12. Damaged merchandise that can only be sold at below cost should bevalued at

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