Question

Net realizable value is

A) selling price less costs to complete and sell.
B) selling price.
C) acquisition cost plus costs to complete and sell.
D) selling price plus costs to complete and sell.

Answer 1

Net realizable value is the estimated selling price of an item in its current condition, less any costs to complete the sale.

Step-by-step explanation:

Net realizable value is the estimated selling price of an item in its current condition, less any costs that would be incurred to complete the sale.

For example, if a company has inventory that it believes can be sold for $1,000 each, but it would cost $100 to package and ship each item, the net realizable value would be $900.

This concept is important in accounting as it helps determine the value of assets and inventory on a company's balance sheet.