The Write-Down of Inventory

question 135

Multiple Choice

The write-down of inventory:

• A)Only affects the balance sheet and not the income statement.
• B)Only affects the income statement and not the balance sheet.
• C)Affects both the income statement and the balance sheet.
• D)Affects neither the income statement nor the balance sheet.

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Definitions:

Gross Material Requirements

The total amount of raw materials needed to produce a particular quantity of finished goods, without accounting for waste or efficiency variations.

Inventory On Hand

The total quantity of goods available and stored by a business at any given time.

Planning Bills Of Material

A documented list of all the components, materials, and assemblies needed to create a product, used for planning and forecasting purposes.

Kits

Assembled sets of components or materials prepared for immediate use or further assembly.