Why Are Inventories Stated at Lower-Of-Cost-Or-Net Realizable Value

question 18

Multiple Choice

Why are inventories stated at lower-of-cost-or-net realizable value?

• A) To report a loss when there is a decrease in the future utility.
• B) To be conservative.
• C) To report a loss when there is a decrease in the future utility below the original cost.
• D) To permit future profits to be recognized.

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Definitions:

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Actions or behaviors that are considered contrary to the values, principles, or interests of the United States.

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