When determining the net realisable value of inventory, estimates must be made of the following:
I Estimated costs of completion (if any)
II Expected replacement cost
III Expected selling price
IV Estimated selling costs
A) I, II, III and IV;
B) I, II and III only;
C) II and IV only;
D) I, III and IV only.

Question

When determining the net realisable value of inventory, estimates must be made of the following:
 I Estimated costs of completion (if any)
II Expected replacement cost
III Expected selling price
IV Estimated selling costs
A) I, II, III and IV;
B) I, II and III only;
C) II and IV only;
D) I, III and IV only.

Quizplus · Accepted Answer

Net realizable value of inventory is determined by estimating the expected selling price in the ordinary course of business, minus the estimated costs of completion and the estimated costs necessary to make the sale. Replacement cost is not considered in this calculation.

When Determining the Net Realisable Value of Inventory, Estimates Must