For requirement 3: (pick one for each option)

(Accounting Conservatism/Consistency Principle/Disclosure Principle/Materiality Concept) is the reason to account for inventory at (average cost/FIFO cost/LIFO cost/the lower of cost or net realisable value). (Conservatism/Comparability/Disclosure/Materiality) directs accountants to decrease the accounting value of an asset if it appears unrealistically high.

Some of A and B Electronics' retail is obsolete. It is now 31 December 2015, and the net realisable value of the ending inventory is $20 000 below the business's cost of the goods, which was $100 000. Before any adjustments at the end of the period, the firm's cost of sales account has a balance of $405 000. Requirements 1. What amount should the firm report for inventory on the balance sheet? 2. What amount should the firm report for cost of sales? 3. Which accounting principle or concept is most relevant to this situation? Requirement 1. What amount should the firm report for inventory on the balance sheet? A and B should report inventory on the balance sheet at $ Requirement 2. What amount should the firm report for cost of sales? A and B should report cost of sales on the income statement at $ Requirement 3. Which accounting principle or concept is most relevant to this situation? directs accountants to decrease the accounting value of an is the reason to account for inventory at asset if it appears unrealistically high