The lower-of-cost-or-net realizable method is used for inventory despite being less conservative than valuing inventory at net realizable value.

Name: The lower-of-cost-or-net realizable method is used for inventory despite being less conservative than valuing inventory at net realizable value.
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Question

Quizplus · Accepted Answer

The lower-of-cost-or-net realizable value method is more conservative because it prevents overstatement of inventory by valuing it at the lower of its cost or its net realizable value.

The Lower-Of-Cost-Or-Net Realizable Method Is Used for Inventory Despite Being