The lower of cost and net realizable value basis of valuing inventories is a departure from the
A) historical cost principle
B) matching principle
C) prudence principle.
D) valuation principle

Question

Quizplus · Accepted Answer

The lower of cost and net realizable value basis is not based on the historical cost principle, which requires assets to be recorded at their original cost. Instead, it allows for inventory to be written down if it is no longer worth its original cost due to market conditions or other factors.

The Lower of Cost and Net Realizable Value Basis of Valuing