When applying the lower-of-cost-or-market rules to inventory valuation in the United States,market value generally refers to the selling price of the inventory.

Question

Quizplus · Accepted Answer

Market value in the lower-of-cost-or-market rule refers to the replacement cost, not the selling price, but it is limited by a ceiling (net realizable value) and a floor (net realizable value minus a normal profit margin).

When Applying the Lower-Of-Cost-Or-Market Rules to Inventory Valuation in the United