The lower of cost and net realizable value basis of valuing inventories ensures that inventories are
A)valued at their current cost.
B)not under-valued.
C)not over-valued.
D)valued at their selling price.

Question

Quizplus · Accepted Answer

The lower of cost and net realizable value method ensures that inventories are not over-valued by valuing them at the lower of their historical cost or the amount they can be sold for, minus any selling costs.

The Lower of Cost and Net Realizable Value Basis of Valuing