Valuation of inventory at cost or net realizable value is based on principle of Conservatism. [Nov. 2019, 2 Marks , Sep 2024, 2 Marks]
Options
A
B
C
D
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Theoretical FrameworkQuestion 4953 of 110
All Questions Correct Answer
✅ Option — Correct Option
All Options:
- A
- B
- C
- D
Detailed Solution & Explanation
True: Because under the principle of 'lower of cost or net realizable value', any loss due to
decrease in sales price of the inventory below its cost is recognized immediately as it is
anticipated that the enterprise will make losses whenever it will sell.
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