Under the lower-of-cost-or-market basis in valuing inventory, market is defined as
A) current replacment cost.
B) selling price.
C) historical cost plus 10%.
D) selling price less markup.

Question

Quizplus · Accepted Answer

Market is defined as current replacement cost under the lower-of-cost-or-market basis in valuing inventory. This means that if the cost of inventory is higher than its current replacement cost, the value of inventory should be written down to market value.

Under the Lower-Of-Cost-Or-Market Basis in Valuing Inventory, Market Is Defined