Which statement concerning lower-of-cost-or-net-realizable-value (LCNRV) is incorrect?
A)LCNRV is an example of a company choosing the accounting method that will be least likely to overstate assets and income.
B)Under the LCNRV basis, market does not apply because assets are always recorded and maintained at cost.
C)The LCNRV basis is justified because of a decline in the selling price of the inventory item.
D)LCNRV is applied after one of the cost flow assumptions has been applied.

Question

Quizplus · Accepted Answer

Under the LCNRV basis, market does apply because assets are recorded at the lower of cost or net realizable value, not always at cost.

Which Statement Concerning Lower-Of-Cost-Or-Net-Realizable-Value (LCNRV) Is Incorrect