Damaged and Obsolete Goods

question 57

Multiple Choice

Damaged and obsolete goods:

• A)Are never included in inventory.
• B)Are included in inventory at their full cost.
• C)Are included in inventory at their net realizable value.
• D)Should be disposed of immediately.
• E)Are assigned a value of zero.

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Definitions:

Profit Margin

A financial metric indicating the percentage of revenue that exceeds the costs of goods sold, demonstrating the profitability of a company.

P/E Ratio

The price-to-earnings ratio, a valuation measure comparing the current share price of a company to its per-share earnings.

Shares Outstanding

The total number of a company's shares of stock that are owned by shareholders, including those held by institutional investors and restricted shares held by company insiders.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year, by comparing current assets to current liabilities.