An Adjustment to Ending Inventory Under the Lower of Cost

question 13

Multiple Choice

An adjustment to ending inventory under the lower of cost and net realizable value (LC&NRV) rule would be least likely to be recorded by a company that sells:

• A)a household staple like laundry detergent.
• B)a fad product like bathing suits.
• C)seasonal items like snow blowers.
• D)high-tech goods like Personal Digital Assistants.

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Definitions:

Wage

The price paid for the use or services of labor per unit of time (per hour, per day, and so on).

Salary Workers

Individuals who receive a fixed regular payment, often monthly, from their employer, regardless of the number of hours worked.

Monopsonist

An economic situation where there is only one buyer in the market, giving the buyer substantial power over prices and terms with suppliers.