Which of the Following Methods of Applying the Lower-Of-Cost-Or-Market Rule

question 28

Multiple Choice

Which of the following methods of applying the lower-of-cost-or-market rule will result in the fewest write-downs of inventory?

• A)The entire stock of inventory in aggregate.
• B)Average of cost of goods sold for the past three years.
• C)Major classes or categories of inventory.
• D)Each individual inventory item.

---

Definitions:

Nonfinancial Asset

Assets that have value but are not monetary or financial in nature, such as property, equipment, or intellectual property.

Insurance Claims

Requests made to an insurance company for payment based on the terms of an insurance policy following a loss, damage, or occurrence of a covered event.

Quit Smoking

The act of stopping the habit of inhaling tobacco smoke, typically to improve health outcomes.

Reinforcement

In psychology, a process by which a stimulus increases the probability of the behavior that it follows.