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.

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