Question

In the context of Inventory valuation, what is Net Realisable Value, When might it be used,...

In the context of Inventory valuation, what is Net Realisable Value, When might it be used, and why?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Net realisable value means Selling price of the inventory in the normal course of the businee.

Inventory cannot be valued more than the net realisable value Since company cannot realise more than market price of that inventory. If inventory valued more that net realisabe value than at later point of time when inventory sold revovarability will be less than the carrying value and balance will be loss.

While calculating inventory value net realisable value should take in to consideration for correct valuation of inventory.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
What is value management, in the context of corporate valuation and decision making?
What is value management, in the context of corporate valuation and decision making?
How does IAS 2 define inventories? And Valuation of stock (inventory) is based on the lower...
How does IAS 2 define inventories? And Valuation of stock (inventory) is based on the lower of cost and net realizable value. In the case of Boohoo plc, when might net realizable be value be lower than cost ?
Explain why proper inventory valuation is so important to the calculation of a company's "bottom line"...
Explain why proper inventory valuation is so important to the calculation of a company's "bottom line" net income. What is the meaning of taking a physical inventory and why is it important to take a physical inventory when using a perpetual inventory system. Explain the accountant's role regarding taking a physical inventory.
Discuss why NOPAT is used in calculating the value of a company instead of net income...
Discuss why NOPAT is used in calculating the value of a company instead of net income in the ROPI equity valuation model.
7. The inventory valuation technique in which the inventory purchased later will be used first is...
7. The inventory valuation technique in which the inventory purchased later will be used first is called…………………… c. LIFO a. Specific Cost b. FIFO d. Average Cost ----------------------------------------------------------------------------------- 8. Administrative expenses belong to the category…………………………………………………………………… b. Period cost a. Product cost c. None of the above
5.) How does absorption-cost valuation of inventory differ from variable-cost valuation of inventory? a. Absorption cost...
5.) How does absorption-cost valuation of inventory differ from variable-cost valuation of inventory? a. Absorption cost valuation of inventory includes fixed manufacturing overhead. b. Absorption cost valuation of inventory is always less than variable cost valuation of inventory c. Absorption cost valuation of inventory includes variable selling costs. d. Absorption cost valuation of inventory includes fixed selling costs. 6.) One advantage of absorption costing is? a. Companies can avoid using estimates in product costing. b. Companies always report higher net...
Question 24 2.5 pts What inventory method is used when the inventory balance is updated only...
Question 24 2.5 pts What inventory method is used when the inventory balance is updated only at the end of the accounting period? Income Summary Perpetual Cost of Goods Sold Periodic Flag this Question Question 25 2.5 pts When using a periodic inventory method, what account is increased when you buy merchandise inventory? Beginning Inventory Supplies Purchases Cost of Goods Sold Flag this Question Question 26 2.5 pts Cost of Goods Sold equals: Beginning Inventory - Net Purchases + Freight-in...
What is the impact of a firm's inventory valuation method to inventory values and profit? Select...
What is the impact of a firm's inventory valuation method to inventory values and profit? Select one: a. A weighted average cost method will always result in highter inventroy values than the LIFO method and lower profit b. The LIFO method always results in higher inventory values than the FIFO method and lower profits c. The FIFO method always results in lower inventory values than the LIFO method and higher profits d. A particular inventory valuation method has no effect...
If costs are declining, will the LIFO or FIFO method of inventory valuation yield the lower...
If costs are declining, will the LIFO or FIFO method of inventory valuation yield the lower cost of goods sold? Why? If inventory errors are said to correct themselves, why are accounting users concerned when such errors are made?
Between LIFO and FIFO, which inventory valuation method gives a better estimate of the replacement cost...
Between LIFO and FIFO, which inventory valuation method gives a better estimate of the replacement cost of inventory when prices are fluctuating? Why?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT