When a company uses the perpetual inventory method,which of the following would be the entry to adjust inventory to lower-of-cost-or-market?

Question

Quizplus · Accepted Answer

The adjustment to lower-of-cost-or-market involves reducing the value of the Merchandise Inventory to its market value or replacement cost. The debit entry is made to Cost of Goods Sold to record the loss in value, and the credit entry is made to Merchandise Inventory to reduce its value. Therefore, the correct entry would be to debit Cost of Goods Sold and credit Merchandise Inventory.

When a Company Uses the Perpetual Inventory Method,which of the Following