When inventory declines in value below original (historical) cost what is the maximum amount that the inventory can be valued at?
A) Sales price
B) Net realizable value
C) Historical cost
D) Sales price reduced by estimated costs to sell

Question

Quizplus · Accepted Answer

Net realizable value is the maximum amount that inventory can be valued at when its market value declines below its original cost. This value is determined by estimating the selling price in the ordinary course of business minus reasonably predictable costs of completion, disposal, and transportation.

When Inventory Declines in Value Below Original (Historical) Cost What