Use the Following Information to Answer Questions 70-71

question 13

Multiple Choice

Use the following information to answer questions 70-71.
Pal Distributers Inc. values its inventory on an LCM basis. The following data came from the 2020 inventory, which consisted of two items:
-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:

Market Equilibrium

A situation where the quantity of goods supplied is equal to the quantity of goods demanded, often resulting in a stable market price.

Excess Demand

A situation in the market where the quantity demanded of a good or service surpasses the quantity supplied at the current price, leading to upward pressure on prices.

Price Of Cheeseburgers

The amount of money required to purchase a cheeseburger, influenced by factors like production costs and market demand.

Supply Shifts

Changes in the supply curve of a good or service, often due to factors like changes in production costs, technological advancements, or changes in the number of producers.