Which of the following is/are correct regarding the valuation of inventory?
A)GAAP require firms to record inventories at acquisition cost
B)GAAP does not permit firms to revalue inventories above acquisition cost
C)GAAP require firms to write down inventories when their replacement cost, or market value, declines below acquisition cost
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

GAAP (Generally Accepted Accounting Principles) require firms to record inventories at acquisition cost, and they also require firms to write down inventories when their replacement cost, or market value, declines below acquisition cost. Additionally, GAAP does not permit firms to revalue inventories above acquisition cost. Therefore, all of the above statements are correct.

Which of the Following Is/are Correct Regarding the Valuation of Inventory