The Primary Basis of Accounting for Inventories Is Cost

Multiple Choice

The primary basis of accounting for inventories is cost. A departure from the cost basis of pricing the inventory is required when:

A) The general price level has changed materially.
B) The FIFO method of inventory valuation is adopted.
C) There is evidence that the replacement cost of the goods at the date they are sold will be less than their cost when purchased.
D) There is evidence that the net realizable value of the goods has declined.