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Inventory reserve is conceptually similar to ?

Inventory reserve is conceptually similar to ?

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Inventory reserve is conceptually similar to ??????

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An inventory reserve is a contra asset account on an organization's monetary record made fully expecting stock that cannot be sold. Consistently, an organization has a stock that cannot be sold for different reasons. It might ruin, drop outdated, or become innovatively out of date. Fully expecting this, the organization will make a section on the accounting report called inventory reserve. Inventory reserve represents the anticipated measure of stock that cannot be sold that year. Stock is considered a asset, and inventory reserve is considered a contra asset, in that it lessens the net measure of stock resources at the organization.

 

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