CFA Practice Question

There are 520 practice questions for this study session.

CFA Practice Question

The reporting of inventory values at the lower of cost or market reflects the accounting principle or convention of ______.

A. cost principle
B. materiality
C. conservatism
Correct Answer: C

The reporting of inventory values at the lower of cost or market reflects the accounting convention of conservatism. Conservatism requires that a company be careful not to overstate assets or understate liabilities on its balance sheet.

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