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

question 42

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 allowance 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\(\quad\)730
• C)
• Loss Due to Market Valuation\(\quad\)\(\quad\)70
• Allowance to Reduce Inventory to Market\(\quad\)70
• D)
• Allowance to Reduce Inventory to Market \(\quad\)800
• Income Summary\(\quad\)\(\quad\)800

Comprehend the impact of technological advancements and production costs on supply.

Understand how changes in income affect demand for different types of goods.

Understand the relationship between quantity demanded and quantity supplied and how it affects market equilibrium.

Identify the factors that cause shifts in demand and supply.

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Definitions:

Voltmeter

An instrument used to measure a level of voltage.

Voltmeters

Instruments used to measure electrical potential difference between two points in an electric circuit.

Single Range

This term could refer to devices or instruments that have only one scale or measurement range, limiting their versatility across different measurement values.

Ayrton Shunt

An ammeter shunt that permits multiple range values.