PRC-1 · Chapter 7 · Question 57 of 100
Using the data from the previous question (Cost = Rs. 26,300, NRV = Rs. 36,600), at what value should this inventory be reported in the financial statements?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Rs. 26,300
Explanation
Inventory must be measured at the lower of cost and net realizable value (NRV). Since the cost (26,300) is lower than the NRV (36,600), it remains valued at its cost.
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