Ask Question
BusinessBusiness
12 July, 16:30

What is meant by market in the lower-of-cost-or-market rule?

+5
Answers (1)
  1. 12 July, 18:19
    0
    Stock is valued at lower of : cost or market price [prudence principle]

    Explanation:

    Prudence or Conservatism is an accounting principle : anticipating for all possible losses & expenditures, not anticipating for possible profits & gains. This makes business better prepared to face all contingent expenditures / losses.

    This concept's implication is that : Stock or Inventory is valued at the value whichever is lesser between 'cost of inventory' & sale price. This makes inventory valuation as per the above explained Prudence / Conservatism principle.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “What is meant by market in the lower-of-cost-or-market rule? ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
Florida law states that a vessel operator involved in an accident must report the accident if property damage exceeds what amount?
Answers (1)
The decision by GE to do business, through subsidiaries, with Iran would have been made at what organizational level? a. First-line management b. Middle-level marketing management c. Front-line supervisor d. Top management e.
Answers (1)
Suppose a firm has a fixed cost of $20,000 and a $5 variable cost for every unit it produces. If it produces 100 units, fixed cost will be equal to $, and variable cost will be equal to $
Answers (1)
Grosheim Incorporated has fixed expenses of $211,500 per year. Right now, Grosheim Incorporated is selling its products for $100 per unit. Management is contemplating a 20% increase in the selling price for the next year.
Answers (1)
Why is it important to research the company prior to a job interview
Answers (1)
New Questions in Business
Which of the following is a positive economic statement? A. Foreign citizens should not be allowed to work without a work visa. B. Due to a decrease in state funding, university tuition has risen. C.
Answers (1)
In preparing its bank reconciliation for the month of April 2020, Sells, Inc. has available the following information.
Answers (1)
While attending classes at her college, Lisa parks her Corvette on the street and locks it. When she returns, it is gone. She reports its loss to her insurer and notifies the police immediately.
Answers (1)
Beverage International reports net credit sales for the year of $252,000. The company's accounts receivable balance at the beginning of the year equaled $48,000 and the balance at the end of the year equaled $58,000.
Answers (1)
On December 2, Coley Corp. acquired 1,400 shares of its $3 par value common stock for $24 each. On December 20, Coley Corp. resold 1,000 shares for $10 each. Which of the following is correct regarding the journal entry for the resold shares? A.
Answers (1)
Home » Business » What is meant by market in the lower-of-cost-or-market rule?
Sign Up Forgot Password?