The Lower of Cost and NRV Principle Specifies That the Comparison

question 68

Multiple Choice

The lower of cost and NRV principle specifies that the comparison is usually applied on

• A) total inventory.
• B) individual categories of inventory.
• C) an item-by-item basis.
• D) major categories of inventory.

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Definitions:

Industry

A group of companies and organizations involved in the production, processing, and distribution of goods and services in a particular sector of the economy.

Marginal Costs

The amplification of total charges incurred from producing an incremental unit of a product or service.

Upward

Referring to a direction or trend that indicates an increase, improvement, or rise in position or value.

Industry Demand Curve

Represents the total demand for a product or service across all consumers in a given market, showing how quantity demanded varies with price.