Generally accepted accounting principles require that the inventory of a company be reported at:
A) Lower of cost or market.
B) Replacement cost.
C) Retail value.
D) Historical cost.
E) Market value.

Question

Quizplus · Accepted Answer

Generally accepted accounting principles require that the inventory of a company be reported at Lower of cost or market. This means that the inventory should be reported at the original cost or the market value, whichever is lower. This is done to ensure that the inventory is not overstated on the balance sheet and that the company does not report excess profits based on the inflated value of inventory. Therefore, option A is the correct answer.

Generally Accepted Accounting Principles Require That the Inventory of a Company