Which of the following statements is incorrect?
A) In certain circumstances, some inventory items will be valued at above cost.
B) In certain circumstances, some inventory items will be valued at below cost.
C) Inventory is normally valued at cost.
D) Net realisable value is related to estimated market value.

Question

Quizplus · Accepted Answer

Inventory is typically valued at the lower of cost or net realizable value (NRV), meaning it is either valued at cost or below cost if the market value has decreased. However, inventory is not valued above cost under normal accounting practices. Net realizable value does indeed relate to the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale, which aligns with market value considerations.

Which of the Following Statements Is Incorrect