Inventory has a cost of $475 000 and a current selling price of $435 000. What amount should be reported on the financial statements and what concept or principle applies?
A)$475 000, going concern
B)$435 000, going concern
C)$475 000, cost
D)$435 000, conservatism

Question

Quizplus · Accepted Answer

The conservatism principle dictates that inventory should be reported at the lower of cost or market value. Since the selling price is lower than the cost, $435,000 should be reported.

Inventory Has a Cost of $475 000 and a Current