When a Company Uses the Perpetual Inventory Method, Which of the Following

question 140

Multiple Choice

When a company uses the perpetual inventory method, which of the following would be the entry to adjust inventory to lower-of-cost-or-market?

• A)Debit Purchases and credit Merchandise Inventory
• B)Debit Inventory and credit Purchases
• C)Debit Cost of Goods Sold and credit Merchandise Inventory
• D)Debit Inventory and credit Cost of Goods Sold

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Definitions:

Problem Solver

An individual or tool that identifies, analyzes, and finds solutions to complex or challenging situations.

Pertinent

Relevant or applicable to a particular matter; aptly or effectively related.

Stroop Effect

A phenomenon demonstrating the interference in reaction time when performing a task, typically illustrated by the difficulty of naming the color of a word when the word itself is a different color.

Automatic Actions

Activities that are performed without conscious thought or attention, typically through learned habits.