Use the Following Information for the Following Questions:
the Following $\$ 585,000$

question 73

Multiple Choice

Use the following information for the following questions:
The following information is available for Anselmo Corporation's inventories:
December 31, 2019:
At cost: $\$ 585,000$
At lower of cost and net realizable value (NRV) : $\$ 525,000$
December 31, 2020:
At cost: $\$780,000$
At lower of cost and net realizable value (NRV) : $740,000 Anselmo uses a periodic inventory system and an allowance account to adjust its inventory from cost to the lower of cost and NRV.
-Anselmo's 2020 journal entry to adjust its inventory from cost to the lower of cost and net realizable value (NRV) will include a

• A) debit of $40,000 to Loss on Inventory Due to Decline in NRV.
• B) debit of $40,000 to Allowance to Reduce Inventory to NRV.
• C) debit of $20,000 to Allowance to Reduce Inventory to NRV.
• D) credit of $40,000 to Recovery of Loss Due to Decline in Inventory.

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Definitions:

Normally Distributed

Describes a continuous variable whose probabilities are symmetrically distributed around the mean, forming a bell-shaped curve known as the normal distribution.

Duration

A measure of the sensitivity of the price of a bond or other debt instrument to changes in interest rates.

Unbiased Estimator

A statistic that accurately estimates the true parameter of a population, meaning its expected value equals the parameter being estimated.

Consistent Estimator

An attribute of an estimator indicating that, as the sample size increases, it converges in probability to the true parameter it estimates.