Your company has 100 units in inventory, purchased at $16 per unit, that could be replaced for $14.
A) The company should credit cost of goods sold for $200.
B) The company should debit revenue for $200.
C) The company should credit inventory for $200.
D) The company should debit inventory for $200.

Question

Quizplus · Accepted Answer

The inventory should be written down to the lower replacement cost, so the company should credit inventory for the difference of $200 (100 units x $2 difference).

Your Company Has 100 Units in Inventory, Purchased at $16