Asked by Lacey Nelson on Jul 20, 2024
Verified
If obsolete or damaged goods can be sold,they will be included in inventory at their original cost.
Obsolete Goods
Items that are no longer useful or saleable due to changes in technology, style, or customer preferences, often leading to inventory write-offs.
Original Cost
The initial cost of acquiring an asset or service, including all expenses related to the purchase.
- Appreciate the significance of inventory valuation adjustments for obsolete or damaged goods.
Verified Answer
DS
Donna ShepherdJul 21, 2024
Final Answer :
False
Explanation :
Obsolete or damaged goods, if they can be sold, should be included in inventory at their net realizable value (NRV), not their original cost. This is because the value of these goods has diminished from their original cost due to damage or obsolescence.
Learning Objectives
- Appreciate the significance of inventory valuation adjustments for obsolete or damaged goods.