Which of the following statements regarding presentation and disclosure of inventories is INCORRECT?
A) Major spare parts and standby equipment may be recognized as inventory if they are not expected to provide benefits beyond the current accounting period.
B) Inventories are one of the most significant assets of manufacturing and merchandising companies.
C) The classification of inventory seldom requires the exercise of professional judgement.
D) Minor spare parts and servicing equipment are usually classified as inventory.

Question

Quizplus · Accepted Answer

The classification of inventory may require the exercise of professional judgement in certain situations, such as determining the appropriate cost flow assumptions or assessing the net realizable value of inventory.

Which of the Following Statements Regarding Presentation and Disclosure of Inventories