If the Replacement Cost of Inventory Is Less Than Its

Multiple Choice

If the replacement cost of inventory is less than its historical cost, the company will write down the inventory by:

A) debiting Cost of Goods Sold and crediting Inventory.
B) debiting Inventory and crediting Cost of Goods Sold.
C) making a note in the financial statements only.
D) debit Inventory for replacement cost, credit Inventory for historical cost.