Which of the following is used for market when valuing inventory at lower-of-cost-or-market?

Question

Quizplus · Accepted Answer

Lower-of-cost-or-market (LCM) is a conservative inventory valuation method where inventory is reported at the lower of its cost or its market value. For market value, the replacement cost of inventory is used, which is the cost that would be incurred to replace the inventory in the current market. Therefore, option B, current replacement price, is the correct choice for valuing inventory at lower-of-cost-or-market. Options A, C, and D are incorrect as they do not consider the replacement cost of inventory.

Which of the Following Is Used for Market When Valuing