external reporting

Navas 27 April 2020 at 13:23 PM

In accounting for inventories, 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 "lower of cost or market." Market as usually defined here means
A) Replacement cost of the inventory.
B) Original cost minus cost to dispose
C) Original cost plus normal profit margin
D) Original cost minus allowance for obsolescence.

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FACULTY 18 May 2020 at 06:12 PM

Replacement cost of the inventory.(option A)

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