A Company's Current LIFO Inventory Consists of 5,000 Units Purchased

question 61

Multiple Choice

A company's current LIFO inventory consists of 5,000 units purchased at $6 per unit.Replacement cost has now fallen to $5 per unit.What is the entry the company must record to adjust inventory to market?

• A)Debit Merchandise Inventory $25,000; credit Cost of Goods Sold $25,000.
• B)Debit Cost of Goods Sold $30,000; credit Merchandise Inventory $30,000.
• C)Debit Cost of Goods Sold $5,000; credit Merchandise Inventory $5,000.
• D)Debit Loss on Inventory $5,000; credit Cost of Goods Sold $5,000.
• E)Debit Merchandise Inventory $30,000; credit Cost of Goods Sold $25,000.

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Definitions:

Partnership Affairs

Aspects of business operations and decision-making that concern the relationship, responsibilities, and activities within a partnership.

Implied Authority

Authority of an agent that is not explicitly stated but inferred from the agent's actions or the circumstances.

Hire and Fire

The ability or authority of an employer to recruit new employees and, if necessary, terminate their employment.

RUPA

The Revised Uniform Partnership Act is a set of laws intended to govern partnerships and their operations in the United States.