When the lower of cost or market (LCM) rule requires an inventory adjustment:
A) the adjustment usually, but not always, reduces the book value of inventory.
B) the write-down is usually reported as a part of cost of goods sold.
C) the inventory adjustment is recorded in a contra-revenue account called sales allowances.
D) the write-down does not affect any of the financial statements.

Question

Quizplus · Accepted Answer

The Answer of When the lower of cost or market (LCM) rule requires an inventory adjustment:
A) the adjustment usually, but not always, reduces the book value of inventory.
B) the write-down is usually reported as a part of cost of goods sold.
C) the inventory adjustment is recorded in a contra-revenue account called sales allowances.
D) the write-down does not affect any of the financial statements.

When the Lower of Cost or Market (LCM) Rule Requires