When stock is valued at cost in one accounting period and at lower of cost and Net realizable value in another accounting period

Question

Quizplus · Accepted Answer

The Prudence Principle, which dictates valuing stock at the lower of cost and net realizable value to avoid overstating assets, can conflict with the Consistency Principle, which emphasizes using the same accounting methods over time for comparability.

When Stock Is Valued at Cost in One Accounting Period