The Logic Behind the Lower-Of-Cost-And-Net-Realizable-Value Rule Is

question 97

Multiple Choice

The logic behind the lower-of-cost-and-net-realizable-value rule is:

• A) Inventory gradually becomes obsolete.
• B) Inventory that is unsalable should be written down to zero (or its scrap value).
• C) An asset is not worth more than it would cost the owner to replace it.
• D) An asset is not worth more than it would be sold at its net realizable value.

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Selection

The process of choosing or preferring something or someone from a group of alternatives based on certain criteria.

Optimization

The process of making something as functional or effective as possible, often used in the context of problem-solving or resource management.

Compensation

A system of rewards, including salary, bonuses, benefits, and other forms of payment, provided to employees for their labor and achievements.

Terminal drop

A significant decline in cognitive abilities shortly before death, often seen in the final years of life.