Explain Why the Lower of Cost and Net Realizable Value

question 47

Essay

Explain why the lower of cost and net realizable value rule is used to value inventory.

---

Definitions:

Special Indorsement

A type of endorsement on a negotiable instrument, such as a check, specifying the person to whom or to whose order the money is to be paid.

Blank Indorsement

An endorsement on a negotiable instrument, such as a check, where the endorser signs their name only, making it payable to the bearer of the instrument.

Restricted Indorsement

A condition placed on the transfer of a negotiable instrument, specifying to whom the instrument can be transferred or the conditions under which it can be paid.

Qualified Indorsement

An endorsement on a negotiable instrument that limits the liability of the endorser or specifies particular conditions.