In no case can "net realizable value" (in the lower of cost and net realizable value rule) be more than
A) estimated selling price in the ordinary course of business.
B) estimated selling price in the ordinary course of business less reasonably predictable costs of completion and disposal.
C) estimated selling price in the ordinary course of business less reasonably predictable costs of completion and disposal and an allowance for a normal profit margin.
D) estimated selling price in the ordinary course of business less reasonably predictable costs of completion and disposal, an allowance for a normal profit margin, and an adequate reserve for possible future losses.

Question

Quizplus · Accepted Answer

Net realizable value is the estimated selling price in the ordinary course of business less reasonably predictable costs of completion and disposal. It does not include an allowance for a normal profit margin or an adequate reserve for possible future losses. Choice B correctly reflects the definition of net realizable value in the lower of cost and net realizable value rule.

In No Case Can "Net Realizable Value" (In the Lower