An argument against use of the lower of cost or net realizable value rule is its lack of:
A) Relevance.
B) Reliability.
C) Consistency.
D) Objectivity.

Question

Quizplus · Accepted Answer

The lower of cost or net realizable value rule may lack consistency because it allows for the valuation of inventory to switch between cost and net realizable value depending on which is lower at the time of assessment, leading to potential fluctuations in reported asset values from period to period.

An Argument Against Use of the Lower of Cost or Net