The Inventory Valuation Rule 'The Lower of Cost and Net

question 1

Multiple Choice

The inventory valuation rule 'the lower of cost and net realisable value' cannot be used with which of these methods?

• A) Perpetual inventory method
• B) Periodic inventory method
• C) Last-in-first-out method
• D) None of the above, i.e., it can be used with all of the methods

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Definitions:

Fixed Supply

A situation where the quantity of a good available is constant and does not change in response to price changes.

One-Of-A-Kind

Unique, without any identical counterpart.

Pure Rent

Payment to a factor of production (land, specifically) in excess of what is needed to keep it in its current use.

Fixed Supply

A situation where the quantity of a good, service, or resource is limited and cannot be changed in the short run, often leading to inelastic supply.