In: Accounting
Your company has 100 units in inventory, purchased at $16 per unit, and this inventory could be replaced at $14 per unit.
Multiple Choice
The company should debit revenue for $200 and credit inventory for $200.
The company should debit loss in inventory value for $200 and credit inventory for $200.
The company should debit inventory for $200 and credit cash for $200.
The company should debit inventory for $200 and credit cost of goods sold for $200.
Decline in value of inventory = 100*(16-14) = $200 |
The company should debit loss in inventory value for $200 and credit inventory for $200. |
Option B is correct |