Assume That There Is a Decline in Inventory Value in One

question 52

Multiple Choice

Assume that there is a decline in inventory value in one period, then there is a reversal of value to the original or higher value and a later period. Which of the following statements about recognition of the loss is true?

• A) The decline in inventory value and related loss should be recognized in the first period and reversed in the second period in all situations.
• B) The decline in inventory value and related loss should be recognized in the first period and reversed in the second period but only if the second period is within the same fiscal year.
• C) The decline in inventory value and related loss should be recognized in the first period and reversed in the second period but only if the second period is within a different fiscal year.
• D) The decline in inventory value and related loss should never be recognized.

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Definitions:

Stator Assembly

The reaction member of a torque converter used to multiply torque that is supported on a free wheel roller race splined to the front support assembly.

TIG Welded

A type of welding that uses a tungsten electrode to produce the weld, known for its strong and high-quality welds, especially on thin materials.

Vortex Flow

Eddy force created by rotational movement. Both a whirlpool and a tornado produce vortex flow, as do the dynamics of a torque converter. See vortex oil flow.

Torque Multiplied

The increase in torque generated through the use of a mechanical system like a gearbox, allowing for greater force to be applied without increasing input power.