1. The lower-of-cost-or-market (LCM) approach was developed to avoid reporting inventory at an amount greater than the benefits it can provide. The LCM approach records losses in the period the value of the inventory drops below its cost instead of later in the period that the goods are ultimately sold. Is this a conservative or an aggressive approach? What does GAAP say about LCM?

2.What happens when we discover a material error in our accounting general ledger and we have already issued financial statements on that period? What steps do we take? A flow chart would be very nice here.