Generally Accepted Accounting Principles (GAAP) Require That Inventory Be Recorded

question 51

Multiple Choice

Generally accepted accounting principles (GAAP) require that inventory be recorded at

• A)the lower of cost or fair market value.
• B)the lower of cost or net realizable value.
• C)the higher of cost or net realizable value less a normal profit (floor).
• D)None of the choices are correct.

---

Definitions:

Necessaries

Essential items or services required for an individual's basic needs and well-being, often related to contracts with minors.

Parent or Guardian Supplies

Items or provisions supplied by a parent or guardian for the care, support, or benefit of their ward or child.

Unconscionability

A doctrine in contract law that describes terms that are so extremely unjust or overwhelmingly one-sided in favor of the party who has superior bargaining power.

Equitable Remedy

A remedy provided by courts in cases where monetary damages are insufficient to resolve a legal dispute, involving actions like specific performance or injunction.