The Adjusting Entry to Recognize the Write Down of Inventory

question 62

Multiple Choice

The adjusting entry to recognize the write down of inventory based on the lower-of-cost-or-market rule will

• A)decrease the cash flow from operating activities.
• B)decrease the amount of liabilities.
• C)increase the amount of assets.
• D)increase the amount of expenses.

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Definitions:

Sales Clerks

Employees who assist customers, handle transactions, and maintain merchandise organization in retail environments.

Customers Served

The number of customers who receive services or goods from a business or organization.

Marginal Product

The additional output produced as a result of adding one more unit of a specific input, holding all other inputs constant.

Average Product

The output per unit of a particular input, such as the quantity of goods produced per worker.