If a Company Is Using the Lower-Of-Cost-Or-Market Rule and a Write-Down

question 132

Multiple Choice

If a company is using the lower-of-cost-or-market rule and a write-down is required, how will that write-down affect the company's financial statements?

• A)Net income will increase.
• B)Gross margin will decrease.
• C)Total assets will decrease.
• D)Net income and total assets will both decrease.

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Definitions:

Spinal Cord

The long, thin, tubular structure made of nervous tissue that extends from the brainstem down the back, transmitting nerve signals between the brain and the rest of the body.

Sensory Neurons

Nerve cells that are responsible for converting external stimuli from the environment into internal electrical impulses for the brain to interpret.

Motor Neurons

Nerve cells forming part of the nervous system that convey commands to muscles, causing them to contract.

Reflex

A simple, automatic response to a sensory stimulus, such as the knee-jerk response.