After evaluating the lower of cost and net realizable value of inventory,the accountant prepares a year-end adjustment.That adjustment would:

Question

Quizplus · Accepted Answer

When the lower of cost or net realizable value (LCNRV) rule is applied, it often results in writing down the inventory to its net realizable value if this value is lower than the cost. This write-down reduces the value of inventory on the balance sheet and decreases the company's stockholders' equity.

After Evaluating the Lower of Cost and Net Realizable Value