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

question 48

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 Loss on Inventory and credit Merchandise Inventory
• B) debit Merchandise Inventory and credit Inventory Adjustment
• C) debit Cost of Goods Sold and credit Merchandise Inventory
• D) debit Merchandise Inventory and credit Cost of Goods Sold

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Definitions:

Aggregate Output

The total value of all goods and services produced in an economy within a given period of time.

Tax Revenue

The government's income from taxes imposed on individuals, businesses, and other legal entities.

Unspecified Government Spending

Government expenditures not clearly allocated or detailed for specific purposes in official documents.

Tax Rate

The rate at which taxes are levied on an individual or a business entity.