A one-time error in the application of the lower of cost or market (LCM)rule in the current period distorts financial results for the current accounting period:
A) only.
B) and the period before.
C) and the period after.
D) and all periods after.

Question

Quizplus · Accepted Answer

A one-time error in applying the LCM rule affects the current period's inventory valuation and cost of goods sold, which in turn affects the financial results of the current period and carries over to the next period as the opening inventory balance is incorrect.

A One-Time Error in the Application of the Lower of Cost