Chapter 9 Flashcards
1
Q
Recognizes losses in the period that the value of inventory declines below cost
A
Lower-of-Cost-or-Market (LCM)
2
Q
Upper limit of market
A
Net Realizable Value (NRV)
3
Q
Lower limit of market
A
Net Realizable Less a Normal Profit Margin
4
Q
The cost to replace the item by purchase or manufacture
A
Replacement Cost
5
Q
Contracts the obligate a company to purchase a specified amount of merchandise or raw materials at specified prices on or before specified dates
A
Purchase Commitments
