The Lower of Cost and Net Realizable Value Basis of Valuing

question 18

Multiple Choice

The lower of cost and net realizable value basis of valuing inventories is a departure from the

• A) historical cost principle
• B) matching principle
• C) prudence principle.
• D) valuation principle

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Definitions:

Capillary Bed

A capillary bed is a network of capillaries, which are small blood vessels, where exchange of water, oxygen, carbon dioxide, and many other nutrient and waste chemical substances occur between blood and surrounding tissues.

Sinusoid

Terminal blood vessel having a larger diameter than an ordinary capillary.

Precapillary Sphincter

Smooth muscle sphincter that regulates blood flow through a capillary.

Relaxation

The state of being free from tension and anxiety, or the act of making something less tight.