TAD,IncUses the Lower of Cost or Market Method to Value

question 44

Multiple Choice

TAD,Inc.uses the lower of cost or market method to value inventory.If the inventory value is replacement cost,which one of the following statements is true?

• A)Historical cost is less than replacement cost.
• B)Replacement cost is greater than net realizable value less a normal profit margin.
• C)Replacement cost is greater than historical cost.
• D)Net realizable value is greater than historical cost.

---

Definitions:

Concrete Operations

A stage in Piaget's theory of cognitive development where children gain the ability to think logically about concrete events.

Jean Piaget

A Swiss psychologist known for his pioneering work in child development and cognitive theory.

Preoperational Children

A stage in Piaget's theory of cognitive development, typically ages 2 to 7, characterized by symbolic thinking and egocentrism but a lack of logical operations.

Abstract Principles

Fundamental concepts that are not tied to specific instances or examples, often guiding thinking and behavior in a broad range of situations.