The modifying convention of conservatism requires that inventory be presented on the balance sheet at

Question

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The modifying convention of conservatism requires that inventory be presented on the balance sheet at either cost or net realizable value, whichever is lower. This means that if the market value of inventory is less than its original cost, the inventory must be written down to net realizable value. This conservative approach reduces the risk of overestimating assets and profits.

The Modifying Convention of Conservatism Requires That Inventory Be Presented