FAR 7.6

Net realizable value minus a normal profit margin is the LCM measure of inventory only if it is (1) -----------------------and (2) equal to or greater than replacement cost.

Net realizable value minus a normal profit margin is the LCM measure of inventory only if it is (1) below original cost and (2) ------------------------------------------.

In accounting for inventories under the LIFO or retail inventory method, generally accepted accounting principles require departure from the historical cost principle when the utility of inventory has fallen below cost. This rule is known as the “lower-of-cost-or-market” rule. The term “market” as defined here means

Inventory accounted for using LIFO or the retail inventory method is measured at the ----------------------------------.

Inventory accounted for using ----------------------- is measured at the lower of cost or net realizable value.

Inventory accounted for using FIFO or average cost is measured at the ----------------------------------------.