Valuation of inventory is done by a business firm at 'cost price or market price whichever is lower'…
The lower-of-cost-or-market valuation reflects the convention of conservatism. This convention avoids overstating inventory and profit by recognising a decline in value…
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Valuation of inventory is done by a business firm at 'cost price or market price whichever is lower' under
Answer and explanation
Correct answer C
The lower-of-cost-or-market valuation reflects the convention of conservatism. This convention avoids overstating inventory and profit by recognising a decline in value rather than anticipating unrealised gains.
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West Bengal SET (WB SET)