When the Market Value of Inventory Items Has Declined Below

question 217

Multiple Choice

When the market value of inventory items has declined below their cost, which method would be the most appropriate in complying with GAAP?

• A)retail
• B)LIFO
• C)lower of cost or market
• D)FIFO

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Definitions:

Basket Of Goods

A fixed set of consumer products and services valued on a regular basis for purposes of tracking inflation.

CPI

The Consumer Price Index measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

Every Month

Refers to occurrences or measurements that happen or are evaluated on a monthly basis.

Bureau Of Labor Statistics

A U.S. government agency responsible for collecting and analyzing data related to employment, wages, and other aspects of the workforce.