Which of the Following Does Not Correctly Describe the Concept

question 46

Multiple Choice

Which of the following does not correctly describe the concept of net realizable value (NRV) ?

• A)Estimates of NRV are based on the best evidence available at and shortly after the balance sheet date.
• B)NRV generally does not change over time
• C)NRV generally changes over time
• D)A new estimate of NRV is required at each balance sheet date.

---

Definitions:

Past Payment History

The record of an individual's or entity's past payments on all debts, used by lenders to gauge creditworthiness.

Initial Credit Purchase

The first acquisition of goods or services that allows payment to be delayed.

Sight Draft

A financial document that demands immediate payment upon presentation to the drawee, often used in international trade.

Time Draft

A written order to pay a specified amount of money at a certain time in the future, often used in international trade.