When applying the lower of cost or market rule to inventory valuation, market generally means
A) current replacement cost.
B) original cost.
C) resale value.
D) original cost, less physical deterioration.

Question

Quizplus · Accepted Answer

The "market" in the lower of cost or market rule refers to the current replacement cost of the inventory, not exceeding net realizable value or falling below net realizable value less a normal profit margin.

When Applying the Lower of Cost or Market Rule to Inventory