Lower cost or market means in regards to reporting merchandise inventory on the balance sheet that Inventory should be reported at the current market value of replacing it when lower than cost. Option B
Generally, A retailer or wholesaler's merchandise inventory is the cost of finished goods (COGS) that the business has on hand to sell to its customers during a specific accounting period. COGS stands for the cost of goods sold.
The price of the books and periodicals that are in stock at a bookstore is considered part of the store's "merchandise inventory."
Instead of reporting an item's current market value, inventories should be valued at the amount that was spent to acquire the item in the first place.
When reporting inventory, the current market value of what it would take to replace it should be used even if the cost is less.
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CQ
Explain what lower cost or market means in regard to reporting merchandise inventory on the balance sheet.
Inventory should be reported at the original cost paid for it and not what it can be sold for in the marketplace.
Inventory should be reported at the current market value of replacing it when lower than cost.
Inventory should be reported at its original cost if the replacement market value (cost) is less.
