1. The lower-of-cost-or-market method cannot be applied to a. each item of inventory. b. each major class or category of inventory. c. total inventory as a whole. d. any inventory not yet received. and net income will be 2. On the income statement, if beginning inventory is understated, then gross profit will be a. overstated; overstated b. understated; understated c. overstated; understated d. understated; overstated and stockholders' equity will be 3. On the balance sheet, if ending inventory is overstated, then total assets will be a. overstated; overstated b. understated; understated C. overstated; understated d. understated; overstated