Lower-of-cost-or-market rule for inventory


Assume that a company applying the lower-of-cost-or-market rule for inventory determines that its ending inventory is overvalued. The journal entry to revalue the inventory could include all of the following except a:

a) debit to Loss Due to Market Decline of Inventory.

b) credit to Inventory.

c) credit to Inventory Allowance for Market Decline.

d) credit to Cost of Goods Sold

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Accounting Basics: Lower-of-cost-or-market rule for inventory
Reference No:- TGS071812

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