Which Account Would Always Be Used for an Inventory Adjustment

question 46

Multiple Choice

Which account would always be used for an inventory adjustment?

• A)Sales
• B)Purchase Returns and Allowances
• C)Cost of Goods Sold
• D)Cash

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Definitions:

Marginal Benefit

The additional pleasure or utility gained when one more unit of a good or service is consumed.

Marginal Cost

The additional cost incurred to produce one more unit of a good or service.

Opportunity Costs

The forfeiture of possible benefits from other options when selecting a specific choice.

Financial Investment

The purchase of a financial asset (such as a stock, bond, or mutual fund) or real asset (such as a house, land, or factories) or the building of such assets in the expectation of financial gain.