When the Lower of Cost or Market Rule/net Realizable Value

question 118

Multiple Choice

When the lower of cost or market rule/net realizable value requires an inventory adjustment,the:

• A)adjustment usually,but not always,reduces the book value of inventory.
• B)write-down is usually reported as a part of cost of goods sold.
• C)inventory adjustment is recorded in a contra-account called Inventory Allowances.
• D)write-down does not affect any of the financial statements.

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