Using a Periodic Inventory System, Bertram Company Records Inventory at Lower

question 30

Multiple Choice

Using a periodic inventory system, Bertram Company records inventory at lower of cost or NRV using the allowance method. The end-of-the-year journal entries to adjust inventories would include

• A) a debit to Inventory to close beginning inventory at cost value.
• B) a debit to Inventory to close ending inventory at market value.
• C) a debit to Loss Due to Write-Down of Inventory for the excess of cost over market value.
• D) a credit to Allowance to Reduce Inventory for the excess of market over cost value.

---

Definitions:

Confidence Interval

A spectrum of numbers, generated from analyzing sample data, expected to cover the value of a not yet identified population trait.

Hypothesis Test

A statistical method that uses sample data to evaluate a hypothesis about a population parameter, determining whether there is enough evidence to reject the null hypothesis.

Rejection Region

In hypothesis testing, the range of values for which the null hypothesis is considered unlikely and is therefore rejected.

Chi-Square Distribution

A statistical distribution that is used to determine the goodness of fit of an observed distribution to an expected one under the null hypothesis.