One Hundred Units of Inventory on Hand at the End

question 107

Multiple Choice

One hundred units of inventory on hand at the end of the year are recorded at their cost of $10 each using LIFO.Current replacement cost is $8.00.How would the Cost of goods sold be affected by the adjusting entry needed under lower-of-cost-or-market?

• A) Cost of goods sold would not be affected.
• B) Cost of goods sold would go down by $80.
• C) Cost of goods sold would go up by $200.
• D) Cost of goods sold would go down by $200.

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Definitions:

McClelland's Theory of Needs

A psychological theory of motivation that asserts individuals are motivated by three primary needs: achievement, affiliation, and power.

Small Business

A privately owned corporation, partnership, or sole proprietorship that has fewer employees and less annual revenue than a corporation or regular-sized business.

Social Worker

A professional dedicated to helping individuals, families, and communities to cope with challenges and improve their well-being by providing support, resources, and advocacy.

High Need for Power

A psychological trait characterized by a strong desire for influence or control over others and situations.