If the Net Realizable Value of a Merchandising Company's Inventory

question 93

Multiple Choice

If the net realizable value of a merchandising company's inventory is higher than its cost

• A) no actions should be taken.
• B) the company's ending owner's equity should be increased to reflect this.
• C) the inventory accounts should be debited and a gain should be reported.
• D) the inventory account should be debited and cost of goods sold credited.

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Definitions:

Kurt Lewin

A pioneering psychologist known for his contributions to social psychology, organizational development, and leadership theories.

Stagnation

A state of inactivity or lack of growth and development, often leading to decreased productivity and innovation.

Slowdown

A reduction in the speed or rate of activities, often referring to economic downturns or decreased productivity.

Enthusiasm

Intense and eager enjoyment, interest, or approval.