A reduction in reported inventory due to market value falling below cost would reduce net income in the current period.

Name: A reduction in reported inventory due to market value falling below cost would reduce net income in the current period.
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Question

Quizplus · Accepted Answer

If the market value of inventory falls below its cost, the company must report a reduction in the value of inventory, which would reduce net income in the current period. This reduction is known as an impairment charge or write-down.

A Reduction in Reported Inventory Due to Market Value Falling