Lower-Of-Cost-Or-Market (LCM) Is to Be Applied to the Following Situation

question 173

Multiple Choice

Lower-of-cost-or-market (LCM) is to be applied to the following situation: Cost, $10; Net realizable value, $8; Replacement cost, $7; Net realizable value less normal profit, $7.50. One unit in inventory should be valued at:

• A) $7.00
• B) $7.50
• C) $8.00
• D) $10.00

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Definitions:

Affirmative Defense

A defense in which the defendant introduces evidence, which, if found to be credible, will negate criminal or civil liability, even if the allegation is true.

Responsive Pleading

A legal document filed in response to an initial complaint, addressing and contesting the points raised.

Motion to Dismiss

A legal request submitted to a court, asking to dismiss a particular case for specific reasons before going to trial.

Discovery

Formal investigation prior to trial. Opposing parties use various methods, such as interrogatories and depositions, to obtain information from each other and from witnesses to prepare for trial.