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In valuing inventory, the lower of cost or market rule has the following drawback. the total difference between selling price and cost is usually recognized

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In valuing inventory, the lower of cost or market rule has the following drawback. the total difference between selling price and cost is usually recognized in the period of the sale. holding losses are recognized, but holding gains are not. the conservatism principle is violated because of the use of the floor constraint. holding gains are recognized, but holding losses are not

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