Match the terms with the descriptions provided.
-Represents a departure from reporting assets at their historical cost.

Question

Quizplus · Accepted Answer

The Lower of cost or market rule represents a departure from reporting assets at their historical cost. It requires inventory to be reported at the lower of the cost to acquire or produce the inventory, and the market value of the inventory.

Other terms:
A) Consignment: A business arrangement where a supplier agrees to place their goods in a retail store owned by another party, with the understanding that the supplier will receive payment only when their goods are sold.
B) Discount period: The timeframe during which a buyer can receive a discount for early payment of an invoice.
C) Inventory: The goods a company holds for sale, raw materials used in producing goods, or items that will be used or consumed in the production of goods or services.
D) LIFO Reserve: A reserve account used to adjust the inventory value under the LIFO inventory valuation method.
F) Purchase allowance: A reduction in the purchase price offered by a supplier to a buyer, usually offered when there are defects or other issues with the goods being sold.
G) Purchase discounts: A reduction in the purchase price offered by a supplier to a buyer who pays the invoice within a certain period of time.
H) Purchase returns: When a buyer returns goods that were previously purchased from a supplier.
I) Purchases: The amount of money a company has spent on buying goods or services during a specific period of time.

Match the Terms with the Descriptions Provided