Inventory Recording and valuation rules Continued

b) To be able to apply the inventory valuation rules identified in question 4a) above you need to understand the terms Cost and Net Realisable Value (NRV).

Explain the following terms in the table below.

.

Term

Explanation / Definition

• Cost

• Net Realisable Value

(NRV)

3 acceptable inventory valuation methods:

Explanation of the Valuation method and its key features or assumptions

(i) Specific Identification

(ii)

(iii)