Recent developments have made much of a company‘s inventory obsolete. This obsolete inventory should be?
AShown in the Balance Sheet at its replacement cost
BWritten down to zero or its scrap value
CShown in the Balance Sheet at cost, but classified as a non-current asset
DCarried in the accounting records at cost until it is sold
Correct answer
B. Written down to zero or its scrap value
Explanation
Written down to zero or its scrap value is the correct answer. Review the question and compare it with the other choices to remember this fact for future exams.