Question

Inventories should be generally valued at lower of cost or *

Answer 1

Answer:

The lower of cost or market rule states that a business must record the cost of inventory at whichever cost is lower – the original cost or its current market price. This situation typically arises when inventory has deteriorated, or has become obsolete, or market prices have declined

Answer 2

The lower of cost or market method lets companies record losses by writing down the value of the affected inventory items. ... The amount by which the inventory item was written down is recorded under cost of goods sold on the balance sheet.