When the cost of inventory is higher than its net realizable value, the inventory is written down to its net realizable value.

Name: When the cost of inventory is higher than its net realizable value, the inventory is written down to its net realizable value.
Brand: Quizplus
Rating: 4.8 (28 reviews)

Question

Quizplus · Accepted Answer

When the cost of inventory exceeds its net realizable value, accounting standards require the inventory to be written down to reflect the lower value, ensuring that financial statements are not overstated.

When the Cost of Inventory Is Higher Than Its Net