The inventory writedown incurred from applying the LCM rule to inventory is
A) not reflected on the Statement of Financial Position.
B) an adjustment to cost of goods sold.
C) not reflected on the Statement of Income.
D) not considered a permanent loss.

Question

Quizplus · Accepted Answer

The inventory writedown from applying the Lower of Cost or Market (LCM) rule is reflected as an adjustment to the cost of goods sold on the Statement of Income, reducing the inventory value and increasing the cost of goods sold.

The Inventory Writedown Incurred from Applying the LCM Rule to Inventory