A Specific Exception to the Use of Historical Cost to Value

question 76

Multiple Choice

A specific exception to the use of historical cost to value assets is if the net realisable value of inventories falls below cost.In this case,the justification for the use of market value rather than cost relies on the:

• A)comparability principle.
• B)cost versus benefit principle.
• C)materiality principle.
• D)conservatism principle.

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Definitions:

Seeing Details

refers to the ability to perceive fine or small elements or differences in objects, images, or scenes.

Cones

Photoreceptor cells in the retina of the eye that function best in relatively bright light and enable humans to perceive color and fine detail.

White, Opaque

A descriptive term typically used in visual or material contexts, indicating an object's color as white and its inability to allow light to pass through.

Outer Wall

Refers to the exterior wall of a structure, acting as the first line of defense or barrier against external elements.