What effect would an adjustment to record inventory at the lower of cost and net realizable value have on the company's financial statements?

Question

Quizplus · Accepted Answer

Recording inventory at the lower of cost and net realizable value would result in a write-down of inventory, which would increase the cost of goods sold expense on the income statement. There would be no impact on assets or stockholders' equity, as the write-down would offset against the inventory asset. There would also be no impact on revenue.

What Effect Would an Adjustment to Record Inventory at the Lower