Net Realizable Value Refers to

question 229

Multiple Choice

Net realizable value refers to

• A) the net amount the company expects to realize from the sale.
• B) the selling price.
• C) the cost to replace the item.
• D) the gross profit realized from the sale.

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Definitions:

Depreciable Asset

An asset that loses value over time and for which depreciation can be applied for tax and accounting purposes.

Capital Gain

The profit earned from the sale of an asset that has increased in value over its purchase price.

Selling Price

The price at which a product or service is sold to customers, which can cover the cost of production and include a profit margin.

Cash Flow Estimates

Projections of the amount of money expected to flow in and out of a business over a specific period.