PRC-1 · Chapter 7 · Question 2 of 100
When calculating the Net Realizable Value (NRV) of an inventory item, which of the following is correct?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Estimated costs of completion and estimated costs necessary to make the sale are deducted from the estimated selling price.
Explanation
NRV is defined as the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.
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