The Lower of Cost or Market (LCM) Rule Is Used

question 117

True/False

The lower of cost or market (LCM) rule is used due to the conservatism constraint, and therefore an inventory calculation may result in a departure from the historical cost principle.

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Definitions:

Boston Massacre

The Boston Massacre was an incident that occurred on March 5, 1770, where British soldiers killed five civilian men, contributing to the unrest that led to the American Revolution.

Paul Revere's Engraving

A famous piece of propaganda art created by Paul Revere, depicting the British attack on Boston which played a significant role in rallying American sentiment against the British.

Coercive Acts

A series of punitive measures enacted by the British Parliament in 1774 aimed at restoring authority over the American colonies, also known collectively in America as the Intolerable Acts.

Quebec Act

A 1774 British law that extended Quebec’s boundaries to the Ohio River, recognized French law and Catholicism in the region, which angered the American colonists and contributed to the American Revolution.