Abel Company must write down its inventory by $30,000 to the net realizable value of $450,000 at December 31,2019.What is the effect of this write-down on the year 2019 financial statements?
A)Decrease cost of goods sold.
B)Decrease ending inventory on the balance sheet.
C)Increase pretax income.
D)Decrease accounts payable.

Question

Quizplus · Accepted Answer

The write-down of inventory will decrease the value of ending inventory on the balance sheet. It will not affect cost of goods sold, pretax income, or accounts payable.

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