The Write Down of Inventories to Net Realisable Value in a Prior

question 17

Multiple Choice

The write down of inventories to net realisable value in a prior period:

• A) can be reversed in a later period with no upper limit from a previous write down.
• B) cannot be reversed in a later period..
• C) can be reversed in a later period but only to the upper limit of the original write down.
• D) can be reversed in a later period so long as the value is recovered within 2 years of the original write down.

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Definitions:

PIKs

Short for "Payment in Kind," a type of financing or loan where the borrower can pay interest or dividends with additional securities instead of cash.

Mortgage Bond

A type of bond secured by a mortgage on one or more assets, offering the bondholder a claim against the assets in case of default.

Securities

Financial instruments that represent an ownership position in a corporation (stocks), a creditor relationship with a governmental body or a corporation (bonds), or rights to ownership as represented by an option.

Equipment

Tangible property other than land or buildings that is used in the operations of a business, such as machinery, tools, or vehicles.