The lower-of-cost-or-market method of accounting for inventories follows the convention of
A)full disclosure.
B)materiality.
C)conservatism.
D)cost-benefit.

Question

Quizplus · Accepted Answer

The lower-of-cost-or-market method is a conservative accounting approach that recognizes potential declines in the value of inventory before such declines are confirmed. This is in line with the conservatism principle in accounting, which requires companies to anticipate losses and prevent overstating assets or income.

The Lower-Of-Cost-Or-Market Method of Accounting for Inventories Follows the Convention