The Bristol Company was recently required to record an inventory write-down of $5,215 because the market value of its inventory was less than cost. Assuming the amount of the write-down is not material (the total inventory was over $9,750,000), which of the following is the appropriate journal entry?
A)Option A
B)Option B
C)Option C
D)Option D

Question

The Bristol Company was recently required to record an inventory write-down of $5,215 because the market value of its inventory was less than cost. Assuming the amount of the write-down is not material (the total inventory was over $9,750,000), which of the following is the appropriate journal entry? 
A)Option A 
B)Option B 
C)Option C 
D)Option D

Quizplus · Accepted Answer

The write-down, when immaterial, is a debit (increase) to cost of goods sold and a credit (decrease) to inventory.

The Bristol Company Was Recently Required to Record an Inventory