Which of the Following Statements Is Incorrect Regarding the Lower-Of-Cost-Or-Net

question 22

Multiple Choice

Which of the following statements is incorrect regarding the lower-of-cost-or-net realizable value (LCNRV) ?

• A) Net realizable value (NRV) is the selling price less estimated costs to complete and estimated costs to make a sale.
• B) In most situations, companies price inventory on a total-inventory basis.
• C) One of two methods may be used to record the income effect of valuing inventory at net realizable value.
• D) Companies use an allowance account, the "Allowance to Reduce Inventory to Net Realizable Value."

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Definitions:

Raw Data

Unprocessed and unanalyzed data collected directly from a source, without any manipulation or treatment.

Regular Time Intervals

Fixed or consistent periods between events, measurements, or observations, facilitating comparison or synchronization.

Trend Projection Equation

A mathematical formula used to forecast future values based on historic data trends, often applied in time series analysis.

Slope

A measure of the steepness, incline, or grade of a straight line, calculated as the ratio of the vertical change to the horizontal change between two points on the line.