An adjustment to ending inventory under the lower of cost or market/net realizable value (LCM/NRV)rule would be least likely to be recorded by a company that sells:
A)a household staple like laundry detergent.
B)a fad product like Slap Wraps bracelets.
C)seasonal items like snow blowers.
D)high-tech goods like cell phones.

Question

Quizplus · Accepted Answer

The value of inventory can fall below its recorded cost for two reasons: (1)It is easily replaced by identical goods at a lower cost or (2)It becomes outdated or damaged.Write-downs under LCM/NRV are the least likely to be recorded by a company that sells a staple such as laundry detergent.Fad products,seasonal items,and rapidly changing high-tech products are more likely to experience a decline in market value.

An Adjustment to Ending Inventory Under the Lower of Cost