The accountants for Ruiz Imports use the lower of cost or market (LCM)method to value inventory on the balance sheet in accordance with GAAP.The accountants have gathered the following information:
Required:
1.Determine the amount of inventory that will be reported on the balance sheet.
2.What principle of accounting supports the lower of cost or market rule for inventory?

Question

The accountants for Ruiz Imports use the lower of cost or market (LCM)method to value inventory on the balance sheet in accordance with GAAP.The accountants have gathered the following information:
  Required:
1.Determine the amount of inventory that will be reported on the balance sheet.
2.What principle of accounting supports the lower of cost or market rule for inventory?

Quizplus · Accepted Answer

The Answer of The accountants for Ruiz Imports use the lower of cost or market (LCM)method to value inventory on the balance sheet in accordance with GAAP.The accountants have gathered the following information:
  Required:
1.Determine the amount of inventory that will be reported on the balance sheet.
2.What principle of accounting supports the lower of cost or market rule for inventory?

The Accountants for Ruiz Imports Use the Lower of Cost