At the End of Its First Year of Business,Payless,Inc

question 86

Essay

At the end of its first year of business,Payless,Inc.had Sales of $800,000 and Cost of goods sold of $500,000 prior to a lower-of-cost-or-market write down.Payless reported its inventory at the lower market value of $90,000 instead of the cost of $100,000.The adjusting entry to record the write down included a decrease to Inventory and Cost of goods sold.
Required: Put an X in the appropriate box to show the effect of lower-of-cost-or-market write down:

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Definitions:

Situational Factors

External forces that influence individuals' behavior and decision-making in specific contexts or environments.

Outgroup Heterogeneity Effects

The tendency to perceive members of an outgroup as more similar to each other than members of one's ingroup, often leading to stereotypes.

Stereotypes

Overgeneralized beliefs or expectations about the characteristics, behaviors, and roles of a particular group of people.

External Attributions

The process of attributing the cause of one's own or others' behaviors and outcomes to external factors.