When the Market Value of Inventory Drops Below the Cost

question 172

Multiple Choice

When the market value of inventory drops below the cost recorded in the financial records,applying the lower of cost or market (LCM) rule causes:

• A) a decrease in cost of goods sold.
• B) no change in net income, other things being equal.
• C) a decrease in total assets.
• D) an increase in net income.

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Definitions:

Traditional Waterfall

A linear and sequential approach to software development and project management, where each phase must be completed before the next one begins.

Agile Development

A software development methodology that delivers functionality in rapid iterations, measured in weeks, requiring frequent communication, development, testing, and delivery.

End-User Development

Approach in which the organization’s end users develop their own applications with little or no formal assistance from the IT department.

Application Portfolio

Refers to the managed set of software applications and digital solutions used by an organization to support its business processes and operations.