Define Net Realizable Value

question 217

Essay

Define net realizable value.How is net realizable value affected when a receivable is written off under the allowance method?

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Definitions:

Net Purchases

The total cost of purchases in a period minus purchase returns, allowances, and discounts.

Cost Of Goods Sold

Direct costs attributable to the production of the goods sold by a company, including material and labor expenses.

Weighted Average

A calculation method that takes into account the varying degrees of importance of the numbers in a data set, resulting in a figure that represents the overall effect.