If the cost of an item of inventory is $60 and the market value is $50, 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 method, inventory is valued at the lower of its cost or market value. In this case, the market value of the inventory is $50 which is lower than its cost of $60. Therefore, the amount included in inventory would be $50.

If the Cost of an Item of Inventory Is $60