Net Realisable Value of Inventories May Fall Below Cost for a Number

question 7

Multiple Choice

Net realisable value of inventories may fall below cost for a number of reasons including:
I Product obsolescence
II Physical deterioration of inventories
III An increase in the expected replacement costs of the inventory
IV An increase in the estimated costs of completion

• A) I, II and IV only;
• B) I, III and IV only;
• C) II, III and IV only;
• D) I and II only.

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Definitions:

Effectiveness

The degree to which objectives are achieved and targeted problems are solved.

Assess

To evaluate or estimate the nature, ability, or quality of something.

Criteria

Standards or principles by which something is judged or decided, serving as a basis for making evaluations or decisions.

Effective Pattern

A consistently successful approach or strategy that achieves desired outcomes across different circumstances.