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The ______ method of valuing inventory was developed to avoid reporting inventory at an amount that is ______ than the benefits it can provide. cost-benefit; greater cost-benefit; smaller lower of cost and sales revenue; smaller lower of cost and net realizable value; greater lower of cost and sales revenue; greater lower of cost and net realizable value; smaller

Respuesta :

stevenslusser

Answer:

lower of cost and net realizable value; greater

Explanation:

The lower of cost or net realizable value method of valuing inventory was developed to avoid reporting inventory at an amount that is greater than the benefits it can provide.

This rule is guided by the conservatism principle of accounting which says that revenue and assets should only be recognized to the extent they are assured of being received. Net realizable value (NRV) is the expected selling price during the ordinary course of business, minus the cost of completing the sale (i.e., completion, disposal, and transportation).

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