Which Statement Below Is TRUE Regarding the Lower of Cost

question 187

Multiple Choice

Which statement below is TRUE regarding the lower of cost or market rule?

• A)Inventory should be reported on the balance sheet at the lower of the replacement value or historical cost.
• B)Inventory should be revalued at the end of each period to its market value.
• C)Inventory should be reported on the balance sheet at whatever amount management honestly believes it is worth.
• D)The LCM rule is based on the cost principle.

---

Definitions:

Computer Analysis

The use of computers and software to analyze data, perform calculations, or solve problems, often involving algorithms and statistical methods.

Trait Categories

Classifications used in personality psychology to organize and describe human characteristics and behaviors systematically.

Personal-Document Technique

A research method using personal texts (e.g., letters, diaries) to study patterns of behavior, attitudes, and social trends.

Multivariate Approach

A statistical technique that involves the analysis of more than two variables to understand relationships and patterns.