Question

Discuss the accounting principle or concept that is most relevant to this situation. Representational Faithfulness is the reason to account for inventory using the lower of cost or market. Conservatism directs accountants to( A ) is the reason to account for inventory using ( B ) ( C ) directs accountants to report inventory at the most realistic and transparent amount.(A) Consistency principle/ Disclosure principle/ Materiality principle/ Representational faithfulness(B) Average cost/ First in, first out/ Last in, first out/ The lower of cost or market(C) Conservatism/ Consistency/ Disclosure/ Materiality/ Representational faithfulness

Answer 1

Complete sentence is given below:

Representational faithfulness is the reason to account for inventory using the lower of cost or market.

Representational faithfulness directs accountants to report inventory at the most realistic and transparent amount.