Lower-Of-Cost-Or-Market (LCM)requires That Merchandise Inventory Be Reported in the Financial

question 170

True/False

Lower-of-cost-or-market (LCM)requires that merchandise inventory be reported in the financial statements at the lower of the historical cost or the current selling price of the inventory.

---

Definitions:

Special Order

A one-time customer order often involving unique specifications, which might not fit into the company's standard offerings.

Variable Cost

Costs that vary directly with the level of production or volume of output, such as raw materials and direct labor.

Fixed Cost

Fixed cost refers to a cost that does not change with the level of output or sales in the short term, such as rent, salaries, or loan payments.

Sunk Cost

Costs that have already been incurred and cannot be recovered or altered.