Which of the Following Statements Does Not Accurately Describe the Lower

question 127

Multiple Choice

Which of the following statements does not accurately describe the lower of cost or net realizable value valuation method for inventory?

• A)The journal entry to write down inventory decreases gross profit.
• B)The journal entry to write down inventory decreases current assets.
• C)The journal entry to write down inventory does not affect pretax income.
• D)The journal entry to write down inventory increases cost of goods sold.

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Definitions:

Living Standards

The level of wealth, comfort, material goods, and necessities available to a certain socioeconomic class or a geographic area.

Productivity

The efficiency with which inputs are converted into outputs, typically measured as the amount of goods and services produced per unit of labor.

Policymakers

Individuals or members of government bodies who are responsible for creating and implementing laws and policies.

Productivity

The efficiency of production measured by the output per unit of input, such as labor or capital, influencing economic growth and living standards.