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:

Relevance

The quality of being closely connected or appropriate to the matter at hand.

Quality

An attribute or characteristic that determines the excellence, condition, or value of something, often measured against standards or requirements.

Citation

A reference or mention of a source, used to give credit to the original author or to support claims in a text.

Journal Article

A scholarly work published in an academic or professional journal, contributing to a particular field of study.