Which of the Following Statements Does Not Accurately Describe the Lower

question 94

Multiple Choice

Which of the following statements does not accurately describe the lower of cost or market (LCM) valuation method?

• 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.The journal entry increases cost of goods sold and therefore decreases gross profit and pretax income. The journal entry also decreases inventory.

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Definitions:

Organizational Mission

The fundamental purpose or goal that guides an organization, describing what it seeks to achieve and who it serves.

Internal Control

Internal control comprises the rules, policies, and procedures an organization implements to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.

Sexual Harassment

Unwelcome sexual advances, requests for sexual favors, or other verbal or physical conduct of a sexual nature in the workplace or learning environments.

Bureaucratic Control

A system of managing an organization through strict policies, procedures, and hierarchy, emphasizing adherence to rules and formal authority.