The lower-of-cost-or-market rule is an application of:a.the materiality conceptb.the disclosure principlec.the consistency principled.accounting conservatism(easy, L.O. 3, d)m.Under the lower-of-cost-or-market rule, market valuegenerally meansa.replacement cost of the inventory at the time of purchase.b.current replacement cost.c.replacement cost of the inventory at the time of sale.d.lowest replacement cost of the inventory during the fiscal year.(moderate, L.O. 3, b)
n.If year-end inventory is reduced from cost to a lower replacement cost, which of the following accurately depicts the results?
o.Given the following data, by how much would taxable income change if LIFO is used rather than FIFO?Beginning inventory3,500 units at $85Purchases 6,800 units at $95Units sold7,100