The lower-of-cost-or-net realizable value method provides for the recognition of inventory losses from price declines in the period the inventory is sold.

Question

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The lower-of-cost-or-net realizable value method requires that inventory losses from price declines be recognized in the period in which the price decline occurs, not in the period the inventory is sold.

The Lower-Of-Cost-Or-Net Realizable Value Method Provides for the Recognition of Inventory