Question
Which of the following represents the best justification for valuing the inventories at the lower of cost and net realizable value? Cost loses its relevance
Which of the following represents the best justification for valuing the inventories at the lower of cost and net realizable value?
Cost loses its relevance for the determination of cost of goods sold if the cost of inventory has been incurred in an earlier accounting period.
The balance sheet valuation of inventory is the most important consideration in the preparation of financial statements.
It is easier to keep track of market value that it is to keep track of cost as market value is available from any supplier.
The practice of writing inventories below cost to net realizable value is consistent with the view that assets should not be carried in excess of amount expected to be realized from their sale or use.
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