a-company-has-inventory-with-a-historical-cost-of-150000-and-a-market-value-of-1

Question

A company has inventory with a historical cost of $$150,000 and a market value of 140$$,000. What should the company do according to the rule of conservatism?

Accepted Answer

Record the inventory at $140,000 and recognize a loss

Answer

Record the inventory at $150,000 and wait for market recovery

Answer

Record the inventory at $150,000 and ignore market value

Answer

Record the inventory at $140,000 and ignore the loss

A company has inventory with a historical cost of \$150,000 and a market value of \$140,000. What should the company do according to the rule of conservatism?