Which of the Following Are Reasons for the Selling Value

question 48

Multiple Choice

Which of the following are reasons for the selling value of some inventory items falling below their cost price?
I. Obsolescence
II. Damage
III. Past use-by date
IV. A rise in the market price

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

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Definitions:

Revaluation

The process of adjusting the book value of a fixed asset or security to reflect its current market value.

Fair Value

The estimated price at which an asset or liability could be exchanged between knowledgeable, willing parties in an arm's length transaction.

Business Combination

A transaction or event through which a company acquires control over one or more businesses.