Inventory cannot be valued at the lower of cost or market if the inventory cost was determined using the FIFO methods.

Question

Quizplus · Accepted Answer

This statement is false. Inventory valued using the FIFO (first in, first out) method can still be valued at the lower of cost or market. It is the LIFO (last in, first out) method that may not be able to use the lower of cost or market rule due to its potential understatement of ending inventory values.

Inventory Cannot Be Valued at the Lower of Cost or Market