The Principle of Lower of Cost or Market and the Potential

question 4

Multiple Choice

The principle of lower of cost or market and the potential obsolescence of inventory are a concern for the audit team as

• A)they are uncommon and may not exist.
• B)they are a burden to the auditor in the undue amount of work caused.
• C)they are likely to occur in the last month of the year and cause cutoff problems.
• D)they are an inherent component of complexity related to valuation.

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Definitions:

Broca's Area

A region in the frontal lobe of the dominant hemisphere (usually the left) of the brain with functions linked to speech production.

Frontal Lobe

A region of the brain located at the front of each cerebral hemisphere, responsible for decision making, problem solving, control of purposeful behaviors, consciousness, and emotions.

Ability To Talk

The capacity to articulate thoughts and emotions through verbal language, enabling communication with others.

Frontal Lobes

The part of the brain located at the front of each cerebral hemisphere, responsible for decision making, problem solving, and control of purposeful behaviors.