If a Company Writes Down Inventory Using the Lower of Cost

question 79

Multiple Choice

If a company writes down inventory using the lower of cost and net realizable value rule, which of the following statements is true?

• A)A loss is recognized in the period when the market value falls below cost.
• B)A loss is recognized in the period when the inventory is sold.
• C)The inventory is carried on the balance sheet at its historical cost.
• D)The company can write the inventory back up if its value recovers.

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Definitions:

Signs

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Nim Chimpsky

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Washoe

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Kanzi

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