When following U.S. GAAP, which of the following statements is not correct regarding the LCM rule for inventory?
A) The individual-item approach to LCM is the most conservative because it results in the largest write-down.
B) U.S. GAAP specifies a preference for using the individual-item approach.
C) Firms can apply the LCM rule for inventory to the aggregate inventory, product lines, or individual items in inventory.
D) U.S. GAAP does not specify a preference for the different methods of applying the lower-of-cost-or-market rule.

Question

Quizplus · Accepted Answer

U.S. GAAP does not specify a preference for using the individual-item approach; it allows firms to choose between individual items, categories, or total inventory.

When Following U