The amount by which cost exceeds market value is considered a loss due to holding inventory and normally is charged to an account such as Loss on Write-Down of Inventory.

Question

Quizplus · Accepted Answer

This statement is true. When the cost of inventory exceeds its market value, the difference is considered a loss and is typically recorded in an account such as Loss on Write-Down of Inventory.

The Amount by Which Cost Exceeds Market Value Is Considered