When the Replacement Cost of Inventory Drops Below the Cost

question 104

Multiple Choice

When the replacement cost of inventory drops below the cost recorded in the financial records,applying the lower of cost or net realizable value (LC&NRV) rule means:

• A)a decrease in cost of goods sold.
• B)no change in net income,other things being equal.
• C)inventory be written down to its net realizable value.
• D)none of the answers are acceptable.

---

Definitions:

Second Intention

A method of wound healing where the wound is left open and allowed to close naturally without surgical closure.

Heavy Exudate

A condition characterized by the release of large amounts of fluid and proteins from blood vessels into surrounding tissues, commonly seen in wounds.

Sacral Region

The area of the lower back that is near the base of the spine, consisting of five fused vertebrae.

Saline-Soaked

Describes material, often gauze or another fabric, that is saturated with a saline solution, commonly used in medical settings to clean wounds or provide moisture.