3. Choose the item that is TRUE regarding the lower of cost or market (LCM). a) LCM violate the historical cost principle and is therefore not allowed under GAAP. LCM is only allowed for internal reporting purposes. b) "Cost" may be determined using one of the four inventory costing methods. c "Cost" must be determined using specific identification for purposes of LCM d) An inventory writes down due to LCM is categorized as an operating expense