ACC 304 Week 3 Chapter 9 Quiz( All Possible Questions)
ACC 304 Week 3 Chapter 9 Quiz( All Possible Questions)
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1. A company should abandon the historical cost principle when the future utility of the inventory item falls below its original cost.
2. The lower-of-cost-or-market method is used for inventory despite being less conservative than valuing inventory at market value.
3. The purpose of the ― floor ‖ in lower-of-cost-or-market considerations is to avoid overstating inventory.
4. Application of the lower-of-cost-or-market rule results in inconsistency because a company may value inventory at cost in one year and at market in the next year.