The Journal Entry to Record a Write-Down of Inventory from Cost

question 88

Multiple Choice

The journal entry to record a write-down of inventory from cost to its lower market value includes a:

• A)debit to Inventory.
• B)credit to Inventory.
• C)credit to Sales Revenue.
• D)debit to Sales Revenue.

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Definitions:

Total Assets

The sum of everything of value owned by a business, including cash, property, inventory, and equipment.

Accounting Equation

Represents the foundation of double-entry bookkeeping, stating that assets equal liabilities plus owners' equity.

Total Capital

The sum of a company's equity capital and debt, representing the total funds that a company can use for operations.

Total Assets

The sum of all current and non-current assets on a company's balance sheet, representing everything the company owns that has value.