What method of inventory valuation is it when the cost of inventory is defined as the amount that an entity would receive from selling the inventory, less any additional selling costs?
A)Replacement cost
B)Net realizable value
C)Average cost
D)FIFO

Question

Quizplus · Accepted Answer

This method is called net realizable value. It is the estimated selling price of inventory, less any costs of completion, disposal or transportation. This method is used when the value of inventory may have decreased due to damage, obsolescence or other factors. It is more conservative than other methods and results in a lower inventory valuation.

What Method of Inventory Valuation Is It When the Cost