Question: ____ 3. When applying the indirect method [allowance method] of accounting for Lower of Cost or Market inventory values which of the following accounts should

____ 3. When applying the indirect method [allowance method] of accounting for Lower of Cost or Market inventory values which of the following accounts should be debited when the initial adjusting entry is made and market is lower than cost?

A. Loss Due to Market Decline in Inventory Value.

B. Cost of Goods Sold.

C. Inventory

D. Allowance to Reduce Inventory to Market

E. Allowance for loss of inventory

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