When Following U

question 13

Multiple Choice

When following U.S. GAAP, which of the following statements is not correct regarding the LCM rule for inventory?

• A) The individual-item approach to LCM is the most conservative because it results in the largest write-down.
• B) U.S. GAAP specifies a preference for using the individual-item approach.
• C) Firms can apply the LCM rule for inventory to the aggregate inventory, product lines, or individual items in inventory.
• D) U.S. GAAP does not specify a preference for the different methods of applying the lower-of-cost-or-market rule.

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