Damaged merchandise that can be sold only at prices below cost should be valued at

Question

Quizplus · Accepted Answer

Damaged merchandise that can only be sold below cost should be valued at its net realizable value, which is the estimated selling price less any additional costs required to make the sale. This is the most conservative approach and reflects the true economic value of the inventory. Using LIFO, FIFO, or average cost methods would not accurately reflect the lower value of the damaged merchandise.

Damaged Merchandise That Can Be Sold Only at Prices Below