Question Details

The lower-of-cost-or-net realizable method is used for inventory 



True or false:
1.	A company should abandon the historical cost principle when the future utility of the inventory item falls below its original cost.

	2.	The lower-of-cost-or-net realizable method is used for inventory despite being less conservative than valuing inventory at net realizable value.

	3.	Application of the lower-of-cost-or-net realizable value rule results in inconsistency because a company may value inventory at cost in one year and at net realizable value in the next year.

	4.	International Financial Reporting Standards (IFRS) require that a company record an inventory write-down as part of cost of goods sold.

	5.	Under International Financial Reporting Standards (IFRS), when companies value inventory using the lower-of-cost-or-net realizable value (LCNRV), in most situations, companies price inventory on a total-inventory basis.



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