A Company Has Inventory with a Net Realizable Value of $217,000

question 140

True/False

A company has inventory with a net realizable value of $217,000 and a cost of $241,000. According to the lower of cost and net realizable value, the inventory should be written down to $217,000.

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Definitions:

Profit Margin

Profit margin represents the percentage of revenue that remains as profit after all expenses have been deducted, highlighting the financial health and profitability of a business.

Financial Data

Quantitative details about the financial status of a company, including balance sheet, income statement, and cash flow statement information.

Residual Income

Income that continues to be generated after the initial effort has been expended, often used in personal finance and corporate finance to denote surplus cash flows.

Invested Assets

Invested assets refer to the resources that have been allocated by an individual or company toward investments with the expectation of generating future profits.