Generally accepted accounting principles require that the inventory of a company be reported at:

Question

Quizplus · Accepted Answer

Lower of cost and net realizable value is a conservative approach to valuing inventory where the inventory is reported at the lower of its cost or its net realizable value, which is the estimated selling price less any costs necessary to make the sale. This approach ensures that the inventory is not overstated on the balance sheet and ensures that potential losses on inventory are recognized.

Generally Accepted Accounting Principles Require That the Inventory of a Company