The Lower-Of-Cost-Or-Market Basis for Inventory Valuation Is a Conservative Accounting

Multiple Choice

The lower-of-cost-or-market basis for inventory valuation is a conservative accounting policy because

A) it recognizes losses from decreases in market value before the firm sells goods.
B) it does not record gains from increases in market value before a sale takes place.
C) it reports inventories on the balance sheet at amounts that are never greater, but may be less than acquisition cost.
D) all of the above
E) none of the above