A company has inventory with a historical cost of \$100,000 and a market value of \$90,000. What should the company do according to the rule of conservatism?

• A. Record the inventory at \$90,000 and ignore the loss
• B. Record the inventory at \$100,000 and ignore market value
• C. Record the inventory at \$90,000 and recognize a loss
• D. Record the inventory at \$100,000 and wait for market recovery

Answer: (C)