If There Is a Recovery in the Value of Inventory

question 43

Multiple Choice

If there is a recovery in the value of inventory the write-up may

• A) always be greater than the original writedown.
• B) never be greater than the original writedown.
• C) always be for the fair value amount of the inventory.
• D) always be for the full amount of the recovery.

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Definitions:

Cash Discounts

Discounts earned by buyers who pay bills within a stated period.

Sterling Industries

A fictitious or placeholder name that could refer to a company involved in manufacturing, technology, or another sector.

Net 30

A payment term that indicates the invoice amount must be paid in full within 30 days from the invoice date.

Cloud Technology

A network of remote servers hosted on the Internet to store, manage, and process data, rather than on a local server or personal computer.