If Net Realizable Value of the Inventory Is Lower Than

question 43

True/False

If net realizable value of the inventory is lower than its cost, the total assets on the statement of financial position and net earnings on the statement of earnings will be reduced.

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Definitions:

Profitable

Describing a situation, venture, or entity that generates income in excess of its expenses, thereby yielding a financial gain.

Marginal Product

The additional output produced as a result of utilizing one more unit of a particular input, holding all other inputs constant.

Labor Input

The total hours worked by employees or the effort exerted by workers in the production of goods and services.

Output

The total amount of goods or services produced within a given period by a firm, industry, or economy.