When the market value of inventory items has declined below their cost, which method would be the most appropriate in complying with GAAP?

Name: When the market value of inventory items has declined below their cost, which method would be the most appropriate in complying with GAAP?
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The lower of cost or market method requires companies to report inventory at the lower of its cost or market value. This allows for more conservative reporting and reflects the current market value of the inventory.

When the Market Value of Inventory Items Has Declined Below