When Inventory Declines in Value Below Original (Historical) Cost, and This

question 29

Multiple Choice

When inventory declines in value below original (historical) cost, and this decline is considered other than temporary, what is the maximum amount that the inventory can be valued at?

• A) Sales price net of conversion costs
• B) Net realizable value
• C) Historical cost
• D) Net realizable value reduced by a normal profit margin

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