The lower of cost and net realizable value basis of valuing inventories is a departure from the

Question

Quizplus · Accepted Answer

The lower of cost and net realizable value basis of valuing inventories departs from the historical cost principle, which states that assets should be recorded at their cost at the time of acquisition. This approach instead values inventory at the lower of its original cost or its current market value, reflecting a more conservative valuation.

The Lower of Cost and Net Realizable Value Basis of Valuing