If the cost of an item of inventory is $50 and the market value is $57, the amount included in inventory according to the lower-of-cost-or-market is:

Question

Quizplus · Accepted Answer

According to the lower-of-cost-or-market rule, inventory should be valued at the lower of its cost or market value. In this case, the cost is $50 and the market value is $57, but we use the lower value, which is $50. Therefore, the amount included in inventory is $50.

If the Cost of an Item of Inventory Is $50