Valuation of inventory at cost or net realizable value is based on principle of Conservatism. [Nov. 2019, 2 Marks , Sep 2024, 2 Marks]
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Theoretical FrameworkQuestion 4953 of 110
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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.
About This Chapter: Theoretical Framework
Paper
Paper 1: Accounting
Weightage
5-10%
Key Topics
Policies, Standards (Ind AS), Vocabulary
This chapter covers Policies, Standards (Ind AS), Vocabulary and is part of Paper 1: Accounting in the CA Foundation exam.
View Official ICAI SyllabusExam Strategy Tip
This topic carries 5-10% weightage. Focus on understanding core concepts rather than memorizing.
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