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What two types of companies is the lower of cost or market rule especially important for?

User Koitt
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Final answer:

The lower of cost or market rule is especially important for companies that deal with perishable goods and fast-changing technology products.

Step-by-step explanation:

The lower of cost or market rule is particularly important for two types of companies: those that deal with perishable goods and those that deal with inventory that becomes outdated or obsolete quickly. Perishable goods, such as food items, have a limited lifespan and their market value can decrease rapidly. For example, if a grocery store has a surplus of strawberries nearing their expiration date, the market value of those strawberries may be lower than their cost. Similarly, companies that deal with fast-changing technology products, such as electronics, need to regularly assess the market value of their inventory to prevent losses from outdated or obsolete items.

User Kamesh Jungi
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