Question $41$ of $45$

View Policies

Current Attempt in Progress

Which of the following statements concerning lower$-$of$-$cost$-$or$-$net$-$realizable$-$value $($LCNRV$)$ is incorrect?

Under the LCNRV basis, market value does not apply because assets are always recorded and maintained at cost$.$

LCNRV is applied after one of the cost flow assumptions has been applied.

The LCNRV basis is justified because of a decline in the selling price of the inventory item.

LCNRV is an example of a company choosing the accounting method that will be least likely to overstate assets and income.