Which Statement Concerning Lower of Cost or Market (LCM) Is

question 191

Multiple Choice

Which statement concerning lower of cost or market (LCM) is incorrect?

• A) LCM is an example of a company choosing the accounting method that will be least likely to overstate assets and income.
• B) Under the LCM basis, market does not apply because assets are always recorded and maintained at cost.
• C) The LCM basis uses current replacement cost because a decline in this cost usually leads to a decline in the selling price of the inventory item.
• D) LCM is applied after one of the cost flow assumptions has been applied.

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Physical Separation

The state of being apart from others in terms of geographical distance or physical space.

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Abrupt and unplanned ending of a relationship.

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