If a Company Values Inventory at the Lower of Cost

question 2

Multiple Choice

If a company values inventory at the lower of cost and NRV, where market is defined as replacement cost, and prices are rising, which cost assumption would most likely require the smallest write down?

• A)FIFO
• B)LIFO
• C)Average cost
• D)The write down is not affected by the cost flow assumption.

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Definitions:

Dry Skin

A condition characterized by a lack of moisture in the skin, leading to itching and flaking.

Emollient

A substance that softens and moisturizes the skin by forming a protective barrier to prevent moisture loss.

Frequent Bathe

The action of washing oneself or another regularly and often to maintain personal hygiene.

Mouth Care

The routine of cleaning and maintaining the mouth, teeth, and gums to prevent infection, tooth decay, and gum disease.