Question

As per AS 2, inventories should be valued at:

A Historical Cost. Correct Answer Incorrect Answer
B Net Realizable Value. Correct Answer Incorrect Answer
C Lower of Cost or Net Realizable Value. Correct Answer Incorrect Answer
D Replacement Cost. Correct Answer Incorrect Answer
E Standard Cost. Correct Answer Incorrect Answer

Solution

This is based on the principle of Prudence/Conservatism, ensuring inventory is not overstated.

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