Homework Answers
Answer: C) reporting inventory at lower of cost or market value.
Explanation: As per the conservatism principle we should record the future anticipated loss but any profit shall be recognize only when it is realize. Thus when there is uncertainty for the outcome of any transaction involving income or asset than such assets or income must be recognized at an amount showing lesser profit.
Therefore Inventory being an asset , it must be recorded at lower of cost or market value.
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