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Which statements regarding the application of lower-of-cost

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Problem 1: Which of the following statements regarding the application of lower-of-cost-or-market (LCM) to inventory is false?

Option 1: The LCM rule applied after calculating ending inventory according to the company's chosen cost flow assumption (e.g. LIFO, FIFO, avg costs)

Option 2: Applying the LCM rule is optional

Option 3: The LCM rule is an example of conservatism in accounting

Option 4: Applying the LCM rule can cause income to decrease but no increase

Reference no: EM132698156

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