Under the LCNRV approach, the net realizable value is the
A) FIFO cost.
B) LIFO cost.
C) estimated selling price less estimated cost to complete and sell.
D) selling price.

Question

Quizplus · Accepted Answer

LCNRV stands for Lower of Cost or Net Realizable Value. It means that inventory should be valued at the lower of its cost or net realizable value. Net realizable value is the estimated selling price less the estimated cost to complete and sell the inventory. Therefore, the answer is C. FIFO cost and LIFO cost do not take into account the net realizable value of inventory, and selling price alone does not account for the cost to complete and sell the inventory.

Under the LCNRV Approach, the Net Realizable Value Is the