Applcation of NRV Rule
Loading

Module 1: Stock recording and valuation

Notes
Study Reminders
Support
Text Version

Applcation of NRV Rule

Set your study reminders

We will email you at these times to remind you to study.
  • Monday

    -

    7am

    +

    Tuesday

    -

    7am

    +

    Wednesday

    -

    7am

    +

    Thursday

    -

    7am

    +

    Friday

    -

    7am

    +

    Saturday

    -

    7am

    +

    Sunday

    -

    7am

    +

XSIQ
*

Accounting - Application of 'lower of cost' and 'net-realisable value'
(NRV) rule

Application of 'lower of cost' and 'net-realisable value' (NRV) rule

This rule is applied to individual stock items. It is important that
students can adequately define each of these terms. Below is an example of
an application of that rule.

Complete the following table by calculating value of stock on hand at the
end of the period.

ITEM
COST
NRV
QUANTITY
VALUE

Printers
450
490
10
4 500

Modems
150
120
6
720

Scanners
300
400
20
6 000

Total

11 220

The typing in bold is the solution to this question. Do not forget to
include the total. You may be asked why the net realisable value [1] for
this brand of modem is lower than cost.

Previous | Next

Links:
------
[1] http://alison.com/#

Notification
You have received a new notification
Click here to view them all