Depreciation costs of holding inventory represent the reduced value of inventory over time.

Name: Depreciation costs of holding inventory represent the reduced value of inventory over time.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Depreciation costs reflect the decrease in the value of inventory over time due to factors such as obsolescence, spoilage, or damage. This cost is a legitimate expense for businesses that carry inventory, and it is important to account for it properly in the financial statements.

Depreciation Costs of Holding Inventory Represent the Reduced Value of Inventory