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Assume a Company Paid $1,000 for a Television That It

Question 87

Multiple Choice

Assume a company paid $1,000 for a television that it plans to sell to its customers. Suppose that because of new technology the company could buy the same television today for $800. How would the lower-of-cost-or-market rule affect the financial statements?


A) Decrease common stock reported on the balance sheet
B) Decrease net income
C) Increase liabilities on the balance sheet
D) Increase stockholders' equity on the balance sheet

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