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Stone Dyson
on Nov 18, 2024

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The use of the lower-of-cost-or-market method of inventory valuation increases net income for the period in which the inventory replacement price declined.

Lower-Of-Cost-Or-Market

An accounting principle that values inventory at the lesser of its historical cost or the market replacement cost, ensuring inventory is not overstated.

Inventory Valuation

The method used to calculate the cost associated with an inventory, which can impact the cost of goods sold and net income.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenue, indicating the company's actual financial performance over a specific period.

  • Comprehend the fundamentals of the lower-of-cost-or-market approach and net realizable value in assessing inventory value.
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JK
Juliane KautzNov 23, 2024
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