The Lower of Cost or Market (LCM) Rule Is Used

question 117

True/False

The lower of cost or market (LCM) rule is used due to the conservatism constraint, and therefore an inventory calculation may result in a departure from the historical cost principle.

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Definitions:

Admire

To regard someone or something with respect, approval, or warm esteem, often because of their qualities, achievements, or beauty.

Suffix

A morpheme added at the end of a word to form a derivative (e.g., -ation, -fy, -ing, -itis).

Pay

The compensation received by an employee from their employer in exchange for their work or services.

Suffix

A letter or group of letters added to the end of a word to change its meaning or indicate its grammatical function.