In order to ensure that the inventory values presented on the statement of financial position at year end reflect the true economic benefits of the inventory,the company may need to
A)have an inventory fire sale.
B)use a perpetual inventory system.
C)use a JIT system.
D)prepare an inventory writedown.

Question

Quizplus · Accepted Answer

Inventory writedowns are adjustments made to the value of inventory to reflect its current market value, which is lower than its recorded cost. This ensures that the inventory values presented on the financial statements accurately reflect the true economic benefits of the inventory, aligning with the principle of conservatism in accounting.

In Order to Ensure That the Inventory Values Presented on the Statement