When Businesses Apply the Lower of Cost and Net Realizable

question 102

True/False

When businesses apply the lower of cost and net realizable value rule on an item by item basis, they will report the lowest inventory value possible.

---

Definitions:

Heuristic

A mental shortcut that allows people to solve problems and make judgments quickly but can sometimes lead to errors in thinking.

Acrostic

A poem, word puzzle, or other composition in which certain letters in each line form a word or words.

Classical Conditioning

A learning process that occurs through associations between an environmental stimulus and a naturally occurring stimulus, leading to a learned response.

Reward

A benefit or positive reinforcement given for a desired behavior, encouraging the behavior to occur again.