Which of the Following Statements Regarding the Application of the Lower-Of-Cost-Or-Market

question 120

Multiple Choice

Which of the following statements regarding the application of the lower-of-cost-or-market (LCM) rule is true?

• A)Generally,market value is greater than replacement cost.
• B)When the LCM rule is used,inventories are valued at selling price.
• C)The LCM rule is most commonly applied on a total inventory basis because it is a more conservative approach.
• D)The LCM rule is an exception to the historical cost principle.