Abel Company Must Write-Down Its Inventory by $30,000 to the Net

question 25

Multiple Choice

Abel Company must write-down its inventory by $30,000 to the net realizable value of $450,000 at December 31, 2016. What is the effect of this writedown on the year 2016 financial statements?

• A)Decrease cost of goods sold.
• B)Decrease ending inventory on the balance sheet.
• C)Increase pretax income.
• D)Decrease accounts payable.

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Definitions:

Daily Grain Intake

The recommended amount of grain foods, such as bread, rice, or pasta, that an individual should consume each day for optimal health.

Starchy Vegetables

Vegetables that are high in starch content, such as potatoes, corn, and peas, providing energy primarily in the form of carbohydrates.

Legumes

A group of plants including beans, peas, and lentils, known for their high protein and fiber content, and beneficial for heart health and weight management.

Healthy Snack

A nutritious food option consumed between meals that contributes to overall health and satisfies hunger, often including fruits, vegetables, whole grains, or nuts.