Damaged and obsolete goods that can be sold:

Question

Quizplus · Accepted Answer

Damaged and obsolete goods that can be sold should be included in inventory at their net realizable value, which is the estimated selling price less any estimated costs of completion, disposal, and transportation. This allows for a more accurate valuation of the inventory and reflects the true economic value of the goods. Option A is incorrect because assigning a zero value to these goods does not accurately reflect their potential to generate revenue. Option B is incorrect because the full cost of damaged and obsolete goods may not be recoverable when they are sold. Option C is incorrect because disposal may not always be the best option, especially if the goods still have some value. Option E is incorrect because damaged and obsolete goods that can be sold are still considered inventory.

Damaged and Obsolete Goods That Can Be Sold