The adjustment to write down inventory from cost to its lower market value includes a debit to Cost of Goods Sold and a credit to Inventory.

Question

Quizplus · Accepted Answer

This statement is true. When inventory is written down from cost to its lower market value, it results in a decrease in the value of inventory and an increase in the cost of goods sold. Therefore, a debit is made to Cost of Goods Sold, and a credit is made to Inventory.

The Adjustment to Write Down Inventory from Cost to Its