If a Company Writes Down Inventory Using the Lower of Cost

Multiple Choice

If a company writes down inventory using the lower of cost and net realizable value rule, which of the following statements is true?

A) A loss is recognized in the period when the market value falls below cost.
B) A loss is recognized in the period when the inventory is sold.
C) The inventory is carried on the balance sheet at its historical cost.
D) The company can write the inventory back up if its value recovers.