In Applying the Lower of Cost and Net Realizable Value

question 129

Multiple Choice

In applying the lower of cost and net realizable value (NRV) to inventory valuation, NRV is defined as:

• A) Historical cost.
• B) Estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.
• C) Current sales price.
• D) FIFO.
• E) LIFO.

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Definitions:

Base Period

A specific time period used as a reference point to measure changes in economic or financial data over different periods of time.