CA foundation inventory valuation
Understand the Problem
The question is asking about inventory valuation in the context of CA (Chartered Accountancy) foundation studies, which involves understanding the methods and principles used to evaluate inventory value in financial statements.
Answer
Valued at the lower of cost and net realizable value.
Inventories for CA Foundation should be valued at the lower of cost and net realizable value as per AS 2.
Answer for screen readers
Inventories for CA Foundation should be valued at the lower of cost and net realizable value as per AS 2.
More Information
In accounting, the concept of valuing inventories at the lower of cost and net realizable value ensures that the inventory does not appear in financials for more than it is worth in the market, ensuring a conservative view.
Sources
- AS 2 - VALUATION OF INVENTORIES - ICAI - live.icai.org
- Inventory Valuation, Meaning, Importance, Methods - Physics Wallah - pw.live
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