A criticism of the practice of carrying inventories at estimated net realizable values is that this practice recognizes income before sales are made.

Question

Quizplus · Accepted Answer

Carrying inventories at estimated net realizable values means that the inventory is recorded at an estimated selling price less the estimated cost of completion and disposal. This can result in recognizing income before sales are actually made, which is a criticism of this practice.

A Criticism of the Practice of Carrying Inventories at Estimated