Under the LCNRV approach, the net realizable value is defined as
A) FIFO cost.
B) LIFO cost.
C) the net amount that a company expects to realize from a sale.
D) selling price.

Question

Quizplus · Accepted Answer

The LCNRV approach emphasizes the importance of valuing inventory at the lower of cost or net realizable value. Net realizable value is defined as the net amount that a company expects to realize from the sale of inventory, which takes into account any selling and administrative expenses necessary to complete the sale. Therefore, the correct choice is C.

Under the LCNRV Approach, the Net Realizable Value Is Defined