Forecasts of the following year can be used in connection with valuing the inventory at lower of cost or market,which influences the amount of cost of goods sold that is shown in the financial statements.

Question

Quizplus · Accepted Answer

Forecasts of the following year can be used to estimate the market value of inventory and compare it to the cost of the inventory. If the market value is lower than the cost, the inventory must be written down to reflect the lower value, which can impact the cost of goods sold shown in financial statements.

Forecasts of the Following Year Can Be Used in Connection