When Inventories Are Written Down Due to the Application of the Lower

question 216

Multiple Choice

When inventories are written down due to the application of the lower of cost and net realizable value rule,which of the following is usually increased?

• A) cost of goods sold
• B) inventories
• C) operating expenses
• D) accumulated depreciation-inventory

---

Definitions:

EIC

Earned Income Credit, a refundable tax credit aimed at low- to moderate-income working individuals and families, particularly those with children, to reduce their tax liability and potentially qualify for a tax refund.

Foreign Income Tax

Taxes paid on income earned from sources outside the taxpayer's country of residence.

Foreign Tax Credit

A credit that reduces the U.S. federal income tax liability for taxpayers paying or accruing income tax to foreign countries, preventing double taxation.

Premium Tax Credit

A refundable tax credit designed to help eligible individuals and families with low to moderate income afford health insurance purchased through the Health Insurance Marketplace.