What is net realizable value, Accounting Basics

Assignment Help:

Q. What is Net realizable value?

Companies must not carry goods in inventory at more than their net realizable value. Net realizable value is the approximate selling price of an item less the estimated costs that the company incurs in preparing the item for sale and selling it. Obsolete, Damaged or shopworn goods often have a net realizable value lower than their historical cost and must be written down to their net realizable value. But goods don't have to be obsolete, damaged or shopworn for this situation to occur.

Technological changes as well as increased competition have caused significant reductions in selling prices for such products as DVD players, computers, TVs and digital cameras.


Related Discussions:- What is net realizable value

Weakness in internal control of procedure for purchase, You have been engag...

You have been engaged internal auditor by the management of Alden proprietary limited to review its internal control over the purchases, receipt, storage and issue of raw material.

Neutrality of accounting information, Q. Neutrality of accounting informati...

Q. Neutrality of accounting information? The Neutrality signifies that the accounting information must be free of measurement method bias. The primary concern must be relevance

Prepare a multiple-step income statement, Prepare a Multiple-Step Income St...

Prepare a Multiple-Step Income Statement based on the information presented in problem 4 above.                    Answer :

A company''s sales volume averages 4, A company’s sales volume averages 4,0...

A company’s sales volume averages 4,000 units per year.  Recently, its main competitor reduced the price of its product to $48.  The company expects sales to drop dramatically

Learning objectives of horizontal and vertical analysis, Q. Learning object...

Q. Learning objectives of Horizontal and vertical analysis? - An account is a storage element used to classify and summarize money measurements of business activities of a simi

Antidilution of ownership, Antidilution of Ownership The right of an i...

Antidilution of Ownership The right of an investor is to continue the same percentage ownership of an organizations main stock in the event that the organization issues more s

Show accounting deception situations, Q. Show accounting deception situatio...

Q. Show accounting deception situations? In 2002 The Sarbanes-Oxley Act was approved. The Act was approved as one result of the large losses to the employees and investors from

Balancesheet derivation question, Assignment Comments –    Debt-to-assets...

Assignment Comments –    Debt-to-assets ratio: 50% Current Ratio: 1.8x Total assets turnover: 1.5x       Days sales outstanding: 36.5 days* Gross profit margin

Gain and loss recognition principle, Q. Gain and loss recognition principle...

Q. Gain and loss recognition principle? The gain and loss recognition principle states that we record gains merely when realized but losses when they first become evident. Ther

prepare the ledger accounts-trial balance-balance sheet , A part of Deeper...

A part of Deeper Coral's income is earned from conducting diving lessons.  Level Lesson Type Fee per hour I Intro

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd