When Applying Lower of Cost or Market Under the LIFO

question 39

Multiple Choice

When applying lower of cost or market under the LIFO or retail inventory method, market value should not be less than

• A) replacement value.
• B) net realizable value.
• C) net realizable value less an allowance for a normal profit margin.
• D) replacement value less an allowance for a normal profit margin.

---

Definitions:

Restaurant

An establishment where meals are prepared and served to customers in exchange for payment.

Nominal Data

Data that consist of names, labels, or categories without any inherent order or ranking among them.

Natural Order

The sequence or arrangement of elements according to their inherent characteristics, often used in sorting algorithms.

Proportions

Measures that express the relationship of a part to the whole, typically in the form of a fraction or percentage.