The valuation of inventories may be on the basis of:
A) The lower of direct cost and recoverable amount.
B) Regular revaluations by classes of inventories undertaken at the end of the period.
C) The weighted average of market value and absorption cost over the period.
D) The lower of cost and net realisable value.
E) All of the given answers.

Question

Quizplus · Accepted Answer

The lower of cost and net realisable value is the appropriate basis for inventory valuation according to accounting standards. This ensures that inventory is not overstated and reflects the true costs that will be incurred to sell the goods.

The Valuation of Inventories May Be on the Basis Of