Question 9
Final Accounts of a Sole TraderThe net realisable value of inventory is the:
I. Cost of purchase less trade discount
II. Estimated selling price less costs to complete and sell
III. Original invoice price of goods
IV. Lower of cost and market value only when prices fall
- A.I only
- B.III only
- C.II only
- D.I and IV only
Show the answer and explanation
Answer: C (II only)
Explanation
NRV = estimated selling price minus the costs of completing and selling the goods.