The lower-of-cost-or-market rule may be applied by comparing the market value of the inventory to the cost of the inventory based on:
A)Individual inventory items.
B)Major inventory categories.
C)The entire inventory.
D)Any of the three: individual inventory items,major inventory categories,or the entire inventory.

Question

Quizplus · Accepted Answer

The lower-of-cost-or-market rule can be applied to the entire inventory or to individual inventory items or major inventory categories. It is up to the company's management to decide which method is best suited for their needs. Therefore, any of the three options can be used for applying the lower-of-cost-or-market rule.

The Lower-Of-Cost-Or-Market Rule May Be Applied by Comparing the Market