Multiple choice

According to Accounting Standard-2, inventory is to be valued at

  1. actual cost or sale value whichever is less

  2. historical cost

  3. net realisable value

  4. historical cost or net realisable value whichever is less
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Accounting Standard-2 (AS-2) mandates that inventory should be valued at the lower of its historical cost or its net realizable value to adhere to the principle of prudence.

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