Asked by Diana Olvera on Apr 24, 2024
Verified
Under the lower-of-cost-or-market basis in valuing inventory market is defined as
A) current replacement cost.
B) selling price.
C) historical cost plus 10%.
D) selling price less markup.
Lower-of-cost-or-market
An accounting principle requiring that inventory be recorded at either the historical cost or the market value, whichever is lower, to ensure assets are not overstated.
Market
A place or platform where buyers and sellers meet to trade goods, services, or financial instruments.
- Acquire knowledge on the lower-of-cost-or-market rule governing inventory valuation.
Verified Answer
HK
Halah Khweleh6 days ago
Final Answer :
A
Explanation :
Under the lower-of-cost-or-market basis, market is defined as current replacement cost, meaning the cost it would take to replace the inventory in current market conditions.
Learning Objectives
- Acquire knowledge on the lower-of-cost-or-market rule governing inventory valuation.