CAF-5 · Chapter 1 · Question 5 of 10
How is the Net Realisable Value (NRV) of an inventory item calculated?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Estimated selling price less estimated cost to complete and estimated selling expenses.
Explanation
Net realisable value is defined as the estimated selling price in the ordinary course of business less the estimated cost of completion and the estimated cost necessary to make the sale.
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