The Journal Entry to Write-Down Inventory Under the Lower of Cost

question 21

True/False

The journal entry to write-down inventory under the lower of cost or market (LCM) rule results in a debit to cost of goods sold and a credit to inventory.

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Definitions:

Claisen Condensation

A chemical reaction where two esters or an ester and a carbonyl compound react in the presence of a base to form a β-keto ester or a β-diketone.

Ester Enolate

A reactive intermediate formed from the deprotonation of an ester, used in various organic synthesis reactions.

pKa

A quantitative measure of the strength of an acid in solution, representing the acid dissociation constant on a logarithmic scale.

Diethyl Malonate

An ester of malonic acid used as a reagent in organic synthesis, particularly in the synthesis of various organic compounds including barbiturates and vitamins.