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Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
Edition 4ISBN: 978-0078025372Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
Edition 4ISBN: 978-0078025372 Exercise 46
Which of the following regarding the lower of cost or market rule for inventory are true
(1) The lower of cost or market rule is an example of the historical cost principle.
(2) When the replacement cost of inventory drops below the cost shown in the financial records, net income is reduced.
(3) When the replacement cost of inventory drops below the cost shown in the financial records, total assets are reduced.
A) (1)
B) (2)
C) (2) and (3)
D) All three
(1) The lower of cost or market rule is an example of the historical cost principle.
(2) When the replacement cost of inventory drops below the cost shown in the financial records, net income is reduced.
(3) When the replacement cost of inventory drops below the cost shown in the financial records, total assets are reduced.
A) (1)
B) (2)
C) (2) and (3)
D) All three
Explanation
Verified
Verified
rule for inventory.
They are given as f...
Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
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