If the Market Value of Inventory Is Greater Than Its

question 23

Multiple Choice

If the market value of inventory is greater than its cost, then the application of the lower-of-cost-or-market rule would:

• A)decrease both the current ratio and net income.
• B)decrease the current ratio but not change net income.
• C)not change the current ratio but decrease net income.
• D)change neither the current ratio nor net income.