The Logic Behind the Lower-Of-Cost-Or-Market Rule Is

Multiple Choice

The logic behind the lower-of-cost-or-market rule is:

A) Inventory gradually becomes obsolete.
B) Inventory that is unsalable should be written down to zero (or its scrap value) .
C) An asset is not worth more than it would cost the owner to replace it.
D) Inventory that is unsalable should be written down to its replacement cost.