Which of the following statements is true regarding the lower of cost or net-realizable value (NRV)? I. Firms have the option whether to apply this accounting method. II. Firms can reduce the cost of inventory but not increase it. III. If the NRV is lower, the entry recorded reduces total assets.

Principles of Accounting Volume 1
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ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter2: Introduction To Financial Statements
Section: Chapter Questions
Problem 12MC: Which of the following is not an element of the financial statements? A. future potential sales...
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Which of the following statements is true regarding the lower of cost or net-realizable value (NRV)?

I. Firms have the option whether to apply this accounting method.

II. Firms can reduce the cost of inventory but not increase it.

III. If the NRV is lower, the entry recorded reduces total assets.

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