When Applying the LCM, the Following Is True

question 42

Multiple Choice

When applying the LCM, the following is true:

• A) The inventory account remains at its original value.
• B) A contra account to inventory is used.
• C) COGS rises when ending inventory is reduced to market value.
• D) LCM can only be applied to individual items.

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Definitions:

Joint And Several

A legal term referring to the liability shared by two or more parties, where each party is individually responsible for the entire obligation, as well as collectively with the others.

Corporate Veil

A legal concept that separates the personal liability of shareholders and officers from that of the corporation itself.

Artificial Legal Person

A non-human entity that is given legal rights and responsibilities, such as a corporation or a government body.

Bylaws

The internal rules of management adopted by a corporation at its first organizational meeting.