The net realisable value of inventory is:
A) the cost of goods sold.
B) the purchase cost of inventory.
C) the selling price less any costs of sale.
D) the selling price less cost of completion and any costs of sale.

Question

Quizplus · Accepted Answer

The net realisable value of inventory is the estimated selling price in the ordinary course of business, less the estimated costs of completion and any estimated costs of sale. This represents the amount that the company expects to receive from selling the inventory. Therefore, option D is correct. Options A and B are incorrect as they only represent either the cost of goods sold or the purchase cost of the inventory, respectively. Option C is incorrect as it only represents the selling price less any costs of sale, without considering the cost of completion.

The Net Realisable Value of Inventory Is