If a Firm Is Using the Lower-Of-Cost-Or-Market Rule and If

question 97

Multiple Choice

If a firm is using the lower-of-cost-or-market rule and if a write-down entry is required,which of the following effects will apply?

• A)Net income will increase.
• B)Gross margin will decrease.
• C)Assets will decrease.
• D)Ggross margin will decrease and assets will also decrease .

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Definitions:

Figure and Ground

A principle in gestalt psychology that refers to the tendency of the perceptual system to simplify a scene into the main object that we focus on (figure) and everything else that forms the background (ground).

Gestalt Principle

A psychological theory suggesting that individuals perceive objects as whole systems rather than the sum of their parts.

Proximity

The state or condition of being close or near; in psychology, it often refers to how physically close people are to each other, which can influence relationships and social interactions.

Gestalt Psychology

A theory of mind that emphasizes the human ability to perceive patterns and wholes in complex data rather than just individual components.