Generally accepted accounting principles require that the inventory of a company be reported at its:
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 its lower of cost or market value. This means that if the market value of the inventory drops below its historical cost, the inventory must be written down to the lower value. This ensures that the inventory is reported at a conservative value on the balance sheet.

Generally Accepted Accounting Principles Require That the Inventory of a Company