When the Lower of Cost or Market (LCM)rule Requires an Inventory

question 155

Multiple Choice

When the lower of cost or market (LCM) rule requires an inventory adjustment:

• A)the adjustment usually,but not always,reduces the book value of inventory.
• B)the write-down is usually reported as a part of cost of goods sold.
• C)the inventory adjustment is recorded in a contra-account called merchandise allowances.
• D)the write-down does not affect any of the financial statements.

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Definitions:

Body's Defenses

The mechanisms by which the body protects itself from infection and disease, including the immune system, physical barriers, and biochemical processes.

Injected Drugs

Medicine or other substances introduced into the body through a syringe.

Classical Conditioning

An approach to learning in which two stimuli are repeatedly linked; the first stimulus alone eventually elicits a response that was initially elicited by the second stimulus.

Extinction

In psychology, the process through which conditioned responses decrease or disappear as an outcome of repeated exposure without reinforcement.