Damaged and obsolete goods that can be sold: Multiple Choice A) Are never counted as inventory. B) Are included in inventory at their full cost. C) Are included in inventory at their net realizable value. D) Should be disposed of immediately. E) Are assigned a value of zero.

Question

Business

Reilly Grant

17 May, 23:20

Damaged and obsolete goods that can be sold: Multiple Choice A) Are never counted as inventory. B) Are included in inventory at their full cost. C) Are included in inventory at their net realizable value. D) Should be disposed of immediately. E) Are assigned a value of zero.

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Answers (1)

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Kinley Bridges · Answer 1

Correct option is (C)

Explanation:

Damaged or obsolete goods that can be sold are included in inventory at net realizable value. They are not recorded in full cost as they are worth less than that. The amount that is received at the time of sale is recorded, which is less than full cost.

Net realizable value is asset value derived from its sale less any amount incurred at the time of sale or disposal of asset.