At the end of the 2011 accounting period Sanchez Company determined that the market value of its

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Question:

At the end of the 2011 accounting period Sanchez Company determined that the market value of its inventory was $39,900 The historical cost of this inventory was $40,700 Sanchez uses the perpetual inventory method The entry necessary to reduce the inventory to the lower of cost or market will

A. increase assets and increase liabilities.
B. decrease assets and decrease liabilities.
C. increase assets and increase net income.
D. decrease assets and decrease net income.