Accounting · Inventory Valuation
When should an item of inventory be written down to its Net Realizable Value (NRV)?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1When the replacement cost of the item is lower than its historical cost
- 2When the item is expected to be sold at a profit, but the selling price has recently decreased
- 3When the item is damaged or obsolete, and its estimated selling price less costs to complete and sell is lower than its cost✓
- 4For all inventory items at every reporting date to remain prudent
Correct answer
When the item is damaged or obsolete, and its estimated selling price less costs to complete and sell is lower than its cost
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Accounting?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Inventory Valuation MCQs →Want more practice questions on Inventory Valuation?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Accounting · Inventory Valuation