At the End of the Year 2 Accounting Period,DeYoung Company

question 66

Multiple Choice

At the end of the Year 2 accounting period,DeYoung Company determined that the market value of its inventory was $79,800.The historical cost of this inventory was $81,400.DeFazio uses the perpetual inventory method.Assuming the amount is material,how will the necessary write-down to reduce the inventory to the lower-of-cost-or-market affect the elements of the company's financial statements?

• A) Decrease total assets and gross margin
• B) Decrease total assets and net income
• C) Increase total assets and net income
• D) Decrease total assets, gross margin, and net income

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Definitions:

Environmental Issues

Concerns related to the impact of human activity on the natural environment, including pollution, climate change, and biodiversity loss.

Functional Area

Specific departments within a business, such as marketing, finance, or human resources, each focusing on particular aspects of the company’s operations.

Sustainable Fishing

Fishing practices that maintain fish populations at a healthy level without jeopardizing the ecosystem's conditions or the ability of future generations to meet their needs.

Green Market

A group of sustainability-oriented customers and the businesses that serve them.