Question
What does net realizable value mean for inventory valuation?
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Answer
Estimated selling price less costs to complete and sell.
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Question
Why is inventory classification disclosure into raw materials, WIP, and finished goods useful?
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Answer
It shows where inventory is concentrated in the production cycle.
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Question
When must inventory be written down under the lower of cost and NRV rule?
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Answer
When NRV falls below cost.
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