When applying the LCM using the direct method the following is true:
A)The inventory account remains at its original value
B)A contra account to inventory is used
C)COGS rises when ending inventory is reduced to market value
D)LCM can only be applied to individual items.

Question

Quizplus · Accepted Answer

When ending inventory is reduced to market value, the cost of goods sold (COGS) increases because the loss is recognized in the period it occurs.

When Applying the LCM Using the Direct Method the Following