In applying LCM, market cannot be:
A) Less than net realizable value minus a normal profit margin.
B) Net realizable value less reasonable completion and disposal costs.
C) Greater than net realizable value reduced by an allowance for normal profit margin.
D) Less than cost.

Question

Quizplus · Accepted Answer

In the lower of cost or market (LCM) rule, the market value cannot be less than the net realizable value minus a normal profit margin. This ensures that inventory is not undervalued.

In Applying LCM, Market Cannot Be