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Which method ...

Question

Which method of inventory valuation is most widely used in accounting?

A

Cost price

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B

Market price

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C

Cost or market price whichever is greater

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D

Cost or market price whichever is lower

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Solution

The correct option is C Cost or market price whichever is lower
Conservatism concept defines that all future losses should be recorded in books of account. Stock is normally valued at cost or market value whichever is lower.

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