Which Statement Below Is TRUE Regarding the Lower of Cost

Multiple Choice

Which statement below is TRUE regarding the lower of cost or market rule?

A) Inventory should be reported on the balance sheet at the lower of the replacement value or historical cost.
B) Inventory should be revalued at the end of each period to its market value.
C) Inventory should be reported on the balance sheet at whatever amount management honestly believes it is worth.
D) The LCM rule is based on the cost principle.