Saturday, June 2, 2012

Why do accountants criticize the practice of carrying inventories at estimated net realizable values

ACCOUNTING

Multiple Choice

Why do accountants criticize the practice of carrying inventories at estimated net realizable values?

a. The costs of producing the products are usually estimates.

b. There is usually no clearly defined realizable value for these inventories.

c. The effect of this practice is to recognize income before sales are made.

d. All of the above are well-recognized criticisms of this practice.

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