What issues arise on the subsequent measurement of inventory?
A)Determining which expenditures to capitalize into the "inventory" account.
B)Determining which expenditures to expense into the "cost of goods sold" account.
C)Determining how much of the costs recognized in inventory should be expensed in the year.
D)Determining the appropriate valuation of inventories that remain on hand.

Question

Quizplus · Accepted Answer

The subsequent measurement of inventory involves determining the appropriate valuation of the inventory that remains on hand. This includes issues such as identifying the cost method to use (e.g. FIFO, LIFO, average cost), determining the net realizable value, and considering any impairment or obsolescence of inventory. While options A, B, and C are all important considerations in accounting for inventory, they relate to the initial recognition and valuation of inventory, rather than subsequent measurement.

What Issues Arise on the Subsequent Measurement of Inventory