At the End of a Reporting Period, Gamble Corporation Determines

question 31

Multiple Choice

At the end of a reporting period, Gamble Corporation determines that its ending inventory has a cost of $300,000 and a market value of $230,000. What would be the effect(s) of the adjustment to write down inventory to market value?

• A) Decrease total assets.
• B) Decrease net income.
• C) Increase retained earnings.
• D) a and b.

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Definitions:

Quantity Supplied

The inventory of products or services that is put up for sale by producers at a specified rate.

Price

The amount of money required to purchase a good or service in the market.

Supply Curve

The supply curve is a graphical representation showing the relationship between the price of a good or service and the quantity of that good or service that a supplier is willing and able to supply.

Nonprice Determinants

Factors that affect demand or supply but are not related to the price of the good or service, such as consumer preferences or production technology.