Why is the lower- of- cost- or- NRV rule applied to inventory valuation?
Question:
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 66% (12 reviews)
The purpose of the LCNRV rule is to avoid overstating ...View the full answer
Answered By
Ashish Bhalla
I have 12 years work experience as Professor for Accounting, Finance and Business related subjects also working as Online Tutor from last 8 years with highly decentralized organizations. I had obtained a B.Com, M.Com, MBA (Finance & Marketing). My research interest areas are Banking Problem & Investment Management. I am highly articulate and effective communicator with excellent team-building and interpersonal skills; work well with individuals at all levels.
4.80+
17+ Reviews
46+ Question Solved
Related Book For
Intermediate Accounting
ISBN: 978-0071339476
Volume 1, 6th Edition
Authors: Beechy Thomas, Conrod Joan, Farrell Elizabeth, McLeod Dick I
Question Posted:
Students also viewed these Accounting questions
-
Why is the lower of cost and net realisable value rule used in the accounting standard? Is it permissible to revalue inventory upwards? If so, when?
-
Why is the lower of cost and net realisable value rule required by accounting standards? Is it permissible to revalue inventories upwards? If so, when? Are there any limits to revaluation?
-
Home Furnishings reports inventory using the lower of cost and net realizable value (NRV). Below is information related to its year-end inventory. Quantity Unit Cost Unit NRV Inventory Furniture $ 92...
-
If you deposit $2,000 today into an account earning an annual rate of return of 9 percent, what would your account be worth In 30 years? a. If you deposit $2, 000 today into an account earning an...
-
Refer to Exercise 18.30. In Exercise 18.30 The following data are from Gennings, Chinchilli, and Carter, (1989). An in vitro toxicity study of isolated hepatocyte suspensions was conducted to study...
-
Define current assets and give three examples.
-
The combustion of ethanol goes according to the following equation: \[ \mathrm{C}_{2} \mathrm{H}_{5} \mathrm{OH}+\ldots \mathrm{O}_{2} ightarrow \ldots \mathrm{CO}_{2}+\ldots \mathrm{H}_{2}...
-
Orange County Chrome Company manufactures three chrome-plated productsautomobile bumpers, valve covers, and wheels. These products are manufactured in two production departments (Stamping and...
-
A camper walks 4.5 km at 45 north of east then 4.5 km due south. Find the camper's total displacement. During a rodeo, a clown runs 10 m north, turns 55north of east, and runs 4.5 m. Then, after...
-
1. Why do you think Rolls has continued to bear this structural currency mismatch so long? Why hasn't it done what many automobile companies have done, and move some of their manufacturing and...
-
In general, why should financial statement users and preparers be especially concerned about inventories?
-
A major spare part is replaced in a machine at a cost of $ 100,000. here is a remain-ing carrying amount of the old part of $ 2,000. How is the $ 2,000 treated?
-
1. Do you think the outcome of this case would have been different if the employee had tested positive for cocaine instead of marijuana? 2. Do you think that having an arbitrator should overrule the...
-
The 18-year, $1,000 par value bonds of Waco Industries pay 7 percent interest annually. The market price of the bond is $895, and the market's required yield to maturity on a comparable-risk bond is...
-
Calculate the maturity risk premium. At present the real risk free rate of interest is .4 percent while inflation is expected to be 1.9 percent for the next two years. If a 2 year treasury note...
-
How does the selection of solvent polarity and solubility parameters influence the efficiency and selectivity of liquid-liquid extraction processes, particularly in the extraction of complex mixtures...
-
Bonita, Ltd. manufactures shirts, which it sells to customers for embroidering with various slogans and emblems. The standard cost card for the shirts is as follows. Standard Price Standard Quantity...
-
Primare Corporation has provided the following data concerning last month's manufacturing operations. Purchases of raw materials Indirect materials used in production Direct labor Manufacturing...
-
Conduct research to identify any recent examples of legal issues regarding self-driving cars.
-
Ex. (17): the vector field F = x i-zj + yz k is defined over the volume of the cuboid given by 0x a,0 y b, 0zc, enclosing the surface S. Evaluate the surface integral ff, F. ds?
-
Bad Debts'Aging Puckett, Inc. includes the following account among its trade receivables. Age the balance and specify any items that apparently require particular attention atyear-end. Alstott Co....
-
Bad Debts'Aging Puckett, Inc. includes the following account among its trade receivables. Age the balance and specify any items that apparently require particular attention atyear-end. Alstott Co....
-
Journalizing Various Receivable Transactions Presented below is information related to Sanford Corp. July 1 Sanford Corp. sold to Legler Co. merchandise having a sales price of $10,000 with terms...
-
Write a simple implementation of an LRU (Least Recently Used) cache with a given capacity. If the cache is full, the least recently used item should be evicted when adding a new item.
-
LGP produces computer hardware equipment. The following information was collected for the latest month: Actual market size (units) 32,000 Budgeted market size (units) 20,000 Actual market share 40%...
-
Sandhill Corporation is in the process of setting a selling price for a recently designed product. The following data relate to this product at a budgeted volume of 60,000 units. Direct materials...
Study smarter with the SolutionInn App