The Lower-Of-Cost-Or-Net Realizable Value Rule for Inventory

Multiple Choice

The lower-of-cost-or-net realizable value rule for inventory:

A) States that inventory must be reported on the balance sheet at its current replacement cost
B) Must be applied to inventory on an item by item basis
C) Places losses from price declines in the period the goods are sold rather than in the period of the price decline
D) May cause inventory to be written up to an amount larger than historic cost
E) None of the above