a-company-has-inventory-with-a-historical-cost-of-100000-and-a-market-value-of-9

Question

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?

Accepted Answer

Record the inventory at $90,000 and recognize a loss

Answer

Record the inventory at $90,000 and ignore the loss

Answer

Record the inventory at $100,000 and ignore market value

Answer

Record the inventory at $100,000 and wait for market recovery

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?