1. Which of the following statement is not correct regarding inventory pools?

A. One company can have several inventory pools at the same time.

B. Pools of inventory can include items that are not identical.

C. The chance of a LIFO Liquidation decreases as the number of different inventory items within a particular pool increases.

D. Managers have no opportunity to manipulate income if inventory pools are used.

E. Inventory pools can be ease the bookkeeping for inventory.

2. In order to approximate the lower cost of cost or market when using the retail inventory method, the cost to retail ratio should:

A. Ignore both markups and markdowns in the denimonator.

B. Include markups but not markdowns in the denominator.

C. Include markdowns but not markups in the denominator.

D. Include markups and markdowns in the denominator.

E. Include only those markdowns that were not cancelled in the numerator.