Match the following terms with the appropriate definition.
-The required method of reporting inventory at market when market is lower than cost.
A)Gross profit method
B)Inventory turnover
C)Conservatism principle
D)Consistency concept
E)Consignor
F)Consignee
G)Days' sales in inventory
H)Retail inventory method
I)Specific identification method
J)Lower of cost or market

Question

Quizplus · Accepted Answer

The "lower of cost or market" rule is an accounting principle that requires inventory to be reported at the lower of its historical cost or its current market value. This approach is in line with the conservatism principle, ensuring that inventory is not overstated on the financial statements.

Match the Following Terms with the Appropriate Definition