The Bradford Company was recently required to record an inventory write-down of $5,200 because the market value of its inventory was less than cost.Assuming the amount of the write-down is immaterial,which of the following journal entries would be recorded?

Question

Quizplus · Accepted Answer

Conceptually,the loss should be reported as an operating expense on the income statement.However,if the amount is immaterial,it can be included in cost of goods sold.The entry to record this immaterial write-down,includes a debit (increase)to cost of goods sold and a credit (decrease)to inventory.

The Bradford Company Was Recently Required to Record an Inventory