An inventory loss from a market decline occurred in the first quarter that was not expected to be restored in the fiscal year.For interim financial reporting purposes,how would the dollar amount of inventory in the balance sheet be affected in the first and fourth quarters? First Quarter Fourth Quarter
A)Decrease No effect
B)Decrease Increase
C)No effect Decrease
D)No effect No effect

Question

Quizplus · Accepted Answer

The inventory loss from a market decline would result in a decrease in the dollar amount of inventory in the first quarter. As this loss is not expected to be restored in the fiscal year, there would be no effect on the dollar amount of inventory in the fourth quarter.

An Inventory Loss from a Market Decline Occurred in the First