Which of the Following Statements Relating to the Lower of Cost

question 15

Multiple Choice

Which of the following statements relating to the lower of cost and net realisable value rule is incorrect?

• A) The rule is based on the accounting principle of prudence (conservatism).
• B) It results in probable losses being recorded in the period when they are first noticed rather than when the sale occurs.
• C) The gross profit reported in the period when the rule is applied is higher than it otherwise would be.
• D) The rule is applied separately to each item of inventory or to each group of inventory.

---

Definitions:

Deep-brain Stimulation

A medical treatment involving the implantation of a device that sends electrical impulses to specific parts of the brain to treat neurological disorders.

Electrodes

Conductive pads or probes used to measure electrical activity in the body or to deliver electrical stimulation.

Cortex

refers to the outer layer of the brain involved in numerous higher-level functions including thought, memory, consciousness, and language.

Eye Socket

The bony structure surrounding the eye, providing it with protection and support within the skull.