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

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 net amount they can be realized from their sale.

The Lower of Cost and Net Realizable Value Basis of Valuing