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

Question

Quizplus · Accepted Answer

Generally accepted accounting principles require that the inventory of a company be reported at the lower of cost or market. This means that if the market value of the inventory falls below its historical cost, then the inventory must be reported at the lower market value. This ensures that the inventory is not overstated on the balance sheet and that the company's financial statements accurately reflect the value of its inventory.

Generally Accepted Accounting Principles Require That the Inventory of a Company