Which of the Following Statements Regarding the Application of the Lower-Of-Cost-Or-Market

Multiple Choice

Which of the following statements regarding the application of the lower-of-cost-or-market method is true?

A) Generally, historical cost is lower than the market value so the lower-of-cost-or-market rule is applied.
B) When the lower-of-cost-or-market method is used, inventories are valued at their selling price.
C) The lower-of-cost-or-market method is most commonly applied on a total inventory basis because it is a more conservative approach.
D) The lower-of-cost-or-market method is an exception to the historical cost principle.