At the End of the Year 2 Accounting Period,DeYoung Company

question 59

Multiple Choice

At the end of the Year 2 accounting period,DeYoung Company determined that the market value of its inventory was $79,800.The historical cost of this inventory was $81,400.DeFazio uses the perpetual inventory method.Assuming the amount is material,how will the entry necessary to reduce the inventory to the lower of cost or market affect the elements of the company's financial statements?

• A)Decrease total assets and gross margin
• B)Decrease total assets and net income
• C)Increase total assets and net income
• D)Decrease total assets,gross margin,and net income

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Contextual

Related to, dependent on, or being the context of a situation or event which influences its meaning or effect.

Biological

Relating to biology; pertaining to the science of life or living organisms.

Psychological

Pertaining to the mind or mental processes, often involving emotional and cognitive functions.

Gender Stereotype

Preconceived ideas whereby females and males are arbitrarily assigned characteristics and roles determined and limited by their gender.