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    The document discusses inventory valuation methods. LCNRV of inventory is always the greater of net realizable value or cost. Lower-of-cost-or-net realizable value reports losses when an item's future utility is below original cost. For a FIFO item costing $76.50 with a replacement cost of $75 and net realizable value of $82.50, the inventory value is $76.50. For an item costing £93 with a replacement cost of £90 and net realizable value of £87.50, the inventory value is £90.

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    PRACTICE 6

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    The document discusses inventory valuation methods. LCNRV of inventory is always the greater of net realizable value or cost. Lower-of-cost-or-net realizable value reports losses when an item's future utility is below original cost. For a FIFO item costing $76.50 with a replacement cost of $75 and net realizable value of $82.50, the inventory value is $76.50. For an item costing £93 with a replacement cost of £90 and net realizable value of £87.50, the inventory value is £90.

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    69 views1 page

    Practice 6

    Uploaded by

    RENIEE
    The document discusses inventory valuation methods. LCNRV of inventory is always the greater of net realizable value or cost. Lower-of-cost-or-net realizable value reports losses when an item's future utility is below original cost. For a FIFO item costing $76.50 with a replacement cost of $75 and net realizable value of $82.50, the inventory value is $76.50. For an item costing £93 with a replacement cost of £90 and net realizable value of £87.50, the inventory value is £90.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    LCNRV of inventory is always

    a) either the net realizable value or cost.


    b) equal to net realizable value.
    c) the greater of net realizable value or cost.
    d) equal to net realizable value less costs to complete.

    Lower-of-cost-or-net realizable value as it applies to inventory is best described as

    a) the reporting of a loss when there is a decrease in the future utility below the
    original cost.
    b) a method of determining cost of goods sold.
    c) the reporting of a gain or loss when there is a decrease in the future utility below
    the original cost.
    d) a change in inventory value to net realizable value.

    The replacement cost of a FIFO cost inventory item is $75. Net realizable value is
    $82.50. The cost of the item is $76.50. The inventory item would be valued at

    a) $0.
    b) $75.
    c) $76.50.
    d) $82.50.

    The replacement cost of an inventory item is ₤90. Net realizable value is ₤87.50. The
    cost of the item is ₤93. The inventory would be valued at

    a) ₤91.50.
    b) ₤90.
    c) ₤93.
    d) ₤87.50.

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