Explain the Meaning of Net Realizable Value and When Raw

question 62

Essay

Explain the meaning of net realizable value and when raw materials, work in progress and finished goods inventories need to be written down.

---

Definitions:

Productivity Of Labor

The measure of the output produced per unit of labor; an increase in labor productivity typically means more output is produced with the same amount of labor.

Total Real Output

The total value of all goods and services produced within a country adjusted for inflation or deflation.

Long-Term Growth

A process where the productive capacity of an economy increases over a long period, typically accompanied by higher living standards.

Economic Fluctuations

The ups and downs in economic activity, characterized by periods of expansion and contraction in GDP and other economic indicators.