The Lower of Cost or Net Realisable Value Procedure Is

question 41

Multiple Choice

The lower of cost or net realisable value procedure is used with which of the following inventory methods?
I. FIFO
II. LIFO
III. Weighted average
IV. The perpetual method

• A) IV only
• B) I and III only
• C) I, II, III and IV
• D) I, III and IV only

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Definitions:

Average Return

The simple mathematical average of a series of returns generated over a period of time.

NPV Technique

A method used in capital budgeting to evaluate the profitability of an investment or project, by calculating the net present value of all cash flows associated with it.

Mutually Exclusive

Events or choices that cannot occur or be taken at the same time.

Capital Projects

Large, longer-term investments undertaken by a business or government to create, maintain, or expand its operational capacity.