Question

Identify the ways in which lower of cost or market can be applied to merchandise inventory. (Check all that apply.) Multiple select question. It can be applied to the inventory as a whole. It can be applied to each item individually. It can be applied to individual sales departments. It can be applied to major categories of items.

Answer 1

Answer:

It can be applied to each item individually.

It can be applied to major categories of items.

It can be applied to the inventory as a whole.

Explanation:

As we know that

The inventory should be valued at the lower of the cost or the market value

So the following are the cases where this rule could be applied with respect to the merchandise inventory

1. It is applied for each and every item on individual basis

2. It can be applied for major items that categorized

3. It can be applied to the overall inventory