If a company writes down inventory using the lower of cost and net realizable va

Question

If a company writes down inventory using the lower of cost and net realizable value rule, which of the following statements is true? A loss is recognized in the period when the inventory is sold. The inventory is carried on the balance sheet at its historical cost. A loss is recognized in the period when the market value falls below cost. The company can write the inventory back up if its value recovers. If a company writes down inventory using the lower of cost and net realizable value rule, which of the following statements is true? A loss is recognized in the period when the inventory is sold. The inventory is carried on the balance sheet at its historical cost. A loss is recognized in the period when the market value falls below cost. The company can write the inventory back up if its value recovers. If a company writes down inventory using the lower of cost and net realizable value rule, which of the following statements is true? A loss is recognized in the period when the inventory is sold. The inventory is carried on the balance sheet at its historical cost. A loss is recognized in the period when the market value falls below cost. The company can write the inventory back up if its value recovers.

Explanation / Answer

If a company writes down inventory using the lower of cost and net realizable value rule than the loss will arise from this valuation will recongnized in the period in which material value is fall.

So As per the above Answer = A loss is recognized in the period when the market value falls below cost.

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