Most companies report their lower of cost or market write-down expense as a ________ expense even if the goods haven't been sold,because it's a necessary cost of carrying and (eventually)selling the goods.
A)Cost of Goods Sold
B)Discount
C)Marketing
D)Lower of Cost or Market

Question

Quizplus · Accepted Answer

Most companies report their inventory write-down expense as Cost of Goods Sold,even though the written-down goods may not have been sold.This reporting is appropriate because writing down goods that haven't yet sold is a necessary cost of carrying the goods that did sell.By recording the write-down in the period in which a loss in value occurs,companies better match their revenues and expenses of that period.

Most Companies Report Their Lower of Cost or Market Write-Down