The lower of cost and net realizable value should be applied to the total inventory, rather than to individual inventory items.

Name: The lower of cost and net realizable value should be applied to the total inventory, rather than to individual inventory items.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The lower of cost and net realizable value (LCNRV) rule is typically applied to individual inventory items, not to the total inventory, to more accurately reflect the value of each item and prevent overstatement of inventory value.

The Lower of Cost and Net Realizable Value Should Be