medium · Financial Accounting accounting-cycle-financial-statements
An entity determines that the Net Realizable Value (NRV) of its inventory is $92,000, while its historical cost is $100,000.
What is the required journal entry under U.S. GAAP?
- Debit Inventory $8,000; Credit Gain on Inventory $8,000.
- No entry is required until the inventory is actually sold.
- Debit COGS $8,000; Credit Inventory $8,000.
- Debit Loss on Inventory $8,000; Credit Allowance for Inventory $8,000.
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