If there is a recovery in the value of inventory the write-up may
A) always be greater than the original writedown.
B) never be greater than the original writedown.
C) always be for the fair value amount of the inventory.
D) always be for the full amount of the recovery.

Question

Quizplus · Accepted Answer

The write-up of inventory value can never exceed the original writedown amount to ensure that the inventory is not valued at more than its historical cost or net realizable value, adhering to the conservatism principle in accounting.

If There Is a Recovery in the Value of Inventory