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

---

Definitions:

Positive Reinforcement

A method in behaviorism where the introduction of a desirable or pleasant stimulus following a behavior increases the likelihood of that behavior being repeated.

Shaping

A method of training by which successive approximations toward a desired behavior are reinforced.

Successive Approximation

A method used in operant conditioning that rewards behaviors progressively closer to a desired one.

Discrimination

Discriminatory practices towards various groups based on race, age, gender, or disability, characterized by unfair or biased treatment.