When inventories are written down due to the application of the lower of cost or market (LCM) rule, which of the following is usually increased?

Question

Quizplus · Accepted Answer

When inventories are written down due to the application of LCM rule, it means that the value of inventories has fallen below their cost. As a result, the cost of goods sold is increased to reflect this lower value of inventories. This helps to accurately measure the profit or loss of the business. Therefore, the correct answer is A - cost of goods sold.

When Inventories Are Written Down Due to the Application of the Lower