Consider the following data: Which of the following depicts the proper account balance after the application of the LCNRV rule?

Question

Consider the following data:  Which of the following depicts the proper account balance after the application of the LCNRV rule?

Quizplus · Accepted Answer

The LCNRV rule stands for Lower of Cost or Net Realizable Value. In this case, the ending inventory balance will be the lower of its cost or net realizable value, which is $115,000 ($120,000 - $5,000). The cost of goods sold will be the difference between the beginning inventory (given in the data) and the ending inventory, which is $161,000 ($280,000 - $119,000).

Consider the Following Data: Which of the Following Depicts