Ace Company is a retailer operating in an industry that experiences inflation (rising prices). Ace wants to maintain a high current ratio. Which inventory costing method should Ace consider using?

Ace Company is a retailer operating in an industry that experiences inflation (rising prices). Ace wants to maintain a high current ratio. Which inventory costing method should Ace consider using?

LIFO

Average cost method

No inventory costing method directly affects the current ratio

FIFO

The LIFO inventory method assumes that the cost of the latest units purchased are

the last to be allocated to cost of goods sold.

the first to be allocated to ending inventory.

the first to be allocated to cost of goods sold.

not allocated to cost of goods sold or ending inventory.

A dishonored note receivable

Is no longer negotiable.

Must be written off by the lender.

Creates a claim against the maker for the amount of principal only.

Is one that is not paid in full within 10 days of maturity.

A concentration of credit risk is a threat of nonpayment from a single customer or class of customers that could adversely affect the financial health of the company.

True

False