Which of the following is not true regarding the lower-of-cost-or-market basis for inventory valuation?
a. It is a conservative accounting policy.
b. It recognizes losses from decreases in market value before a sale occurs.
c. It recognizes gains from increases in market value above original acquisition cost only when a sale occurs.
d. It reports inventories on the balance sheet at amounts that are never greater, but may be less, than acquisition cost.
e. It reports inventories on the balance sheet at amounts that are equal to the acquisition cost less a normal profit margin.
E
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A) Cause and effect B) Generalization C) Circular reasoning D) Mistaken assumptions E) Faulty analogies
Normative myopia occurs only in business.
Answer the following statement true (T) or false (F)
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