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Which 3 statements are true about revaluing inventory? (Select all that apply) A) An inventory valuation...

Which 3 statements are true about revaluing inventory? (Select all that apply)

  • A) An inventory valuation adjustment can be created.
  • B) An Obsolescence inventory asset account should be created.
  • C) Best practice is to use a Clearing bank type of account to record entries.
  • D) Use an inventory adjustment to adjust the quantity (and value) down to zero.
  • E) Use a zero-dollar purchase transaction to revalue the inventory.
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Answer #1

The three statements which are true about revaluing the inventory :

  • A) An inventory valuation adjustment can be created. ( to adjust the short-fall and excess stock)
  • B) An Obsolescence inventory asset account should be created. (to adjust the obsolete inventory)
  • E) Use a zero-dollar purchase transaction to revalue the inventory. (to increase the quantities on hand)

Option C is not true because no bank entries can be adjusted through inventory revaluation entry.

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