Given the Following Information for the Rachel Company If the Direct Method of Recording Lower of Cost or Date

question 30

Multiple Choice

Given the following information for the Rachel Company: $\begin{array}{lll}\text { Date } & \text { Cost } & \text { Market } \\\hline \text { December 31, 2010 } & \$ 500 & \$ 500 \\\text { December 31, 2011 } & 700 & 650 \\\text { December 31, 2012 } & 800 & 730\end{array}$ If the direct method of recording lower of cost or market is in use, which December 31, 2012 entry is correct?

• A)
• Loss Due to Market Valuation\(\quad\)\(\quad\)20
• Allowance to Reduce Inventory to Market\(\quad\)20
• B)
• Inventory\(\quad\)\(\quad\)730
• Income Summary\(\quad\)\(\quad\)730
• C)
• Loss Due to Market Valuation \( \quad 70 \)
• Allowance to Reduce Inventory to Market \( \quad 70 \)
• D)
• \(\begin{array}{ll}
• \text { Inventory } & 800 \\
• \text { Income Summary } &800
• \end{array} \)

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Definitions:

Personality

The fusion of attributes and traits that define an individual's distinct persona.

Organizational Commitment

The psychological attachment felt by an individual towards an organization, reflecting the individual's willingness to remain part of the organization.

Work Commitment

The degree of dedication an individual shows toward their job, often reflected in their work ethic and engagement.

Mental Willpower

The inner strength and self-discipline that allows an individual to face challenges, resist temptations, and adhere to personal goals and values.