If Year-End Inventory Is Reduced from Cost to a Lower

question 3

Multiple Choice

If year-end inventory is reduced from cost to a lower net realizable value, which of the following accurately depicts the results?

• A) The capital account balance is increased and beginning inventory of the next period is reduced by the same amount.
• B) Cost of goods sold is increased and beginning inventory of the next period is decreased by the same amount.
• C) Cost of goods sold is reduced and beginning inventory of the next period is reduced by the same amount.
• D) Year-end inventory is reduced and cost of goods sold is reduced by the same amount.

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Definitions:

Radical Equation

An equation in which the variable is contained within a radical symbol or has a radical expression with the variable.

Cube Root

The number that produces a given number when cubed, essentially the cube root of a number is a value that, when multiplied by itself three times, gives the original number.

Pendulum Period

The time it takes for a pendulum to complete one full swing back and forth, depending on its length and the acceleration due to gravity.

Complete Cycle

A full sequence of events or stages that returns to the starting point.