Which of the following statement about the inventory write-down is not correct? * If the cost is lower than net realizable value, there is no accounting problem because the inventory is measured at cost and the increase in value is not recognized. The write down of inventory cost to lower of cost and net realizable value may be recorded using direct method or allowance method which may result to the same cost of sales amount. If the net realizable value is lower than cost, the inventory is measured at net realizable value and the decrease in value is recognized.

Which of the following statement about the inventory write-down is not correct? * If the cost is lower than net realizable value, there is no accounting problem because the inventory is measured at cost and the increase in value is not recognized. The write down of inventory cost to lower of cost and net realizable value may be recorded using direct method or allowance method which may result to the same cost of sales amount. If the net realizable value is lower than cost, the inventory is measured at net realizable value and the decrease in value is recognized.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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