The inventory valuation rule 'the lower of cost and net realisable value' cannot be used with which of these methods?
A) Perpetual inventory method
B) Periodic inventory method
C) Last-in-first-out method
D) None of the above, i.e., it can be used with all of the methods

Question

Quizplus · Accepted Answer

The 'lower of cost and net realisable value' rule is a principle of inventory valuation that can be applied regardless of the inventory accounting method used, whether it be perpetual, periodic, or last-in-first-out (LIFO). This rule ensures that inventory is reported at the lower of its historical cost or the net amount that can be realized from its sale, providing a conservative valuation on financial statements.

The Inventory Valuation Rule 'The Lower of Cost and Net