Under GAAP, which of the following amounts would be reported as Merchandise Inventory on the balance sheet of a company if the cost of an item is $85 and the current replacement cost is $70?

Question

Quizplus · Accepted Answer

Under GAAP, inventory is reported at the lower of cost or market (LCM). Since the current replacement cost ($70) is lower than the cost ($85), the inventory should be reported at $70.

Under GAAP, Which of the Following Amounts Would Be Reported