Which of the Following Statements Does Not Accurately Describe the Lower

Multiple Choice

Which of the following statements does not accurately describe the lower of cost or market (LCM) valuation method?

A) The journal entry to write-down inventory decreases gross profit.
B) The journal entry to write-down inventory decreases current assets.
C) The journal entry to write-down inventory does not affect pretax income.
D) The journal entry to write-down inventory increases cost of goods solD.The journal entry increases cost of goods sold and therefore decreases gross profit and pretax income. The journal entry also decreases inventory.