Week 9 Flashcards
(2 cards)
1
Q
What are the costs which are permitted to be included in inventory?
A
- Retail operations: finished goods
- Manufacturing: finished goods, work-in progress goods and raw materials
- Service industry: work-in progress goods
2
Q
What are the reasons NRV may fall below cost?
A
- Permanent fall in market price of inventory
- Physical deterioration
- Product obsolescence
- Deliberate decision to sell “below cost” as marketing strategy
- Deliberate decision to dispose of high inventory levels
