Nelson Corporation is required to record an inventory write-down of $2,500 as a result of using the lower-of-cost-or-market rule. Which of the following shows how this entry would affect the financial statements?

	Balance Sheet	Income Statement	Statement of Cash Flows
Assets	=	Liabilities	+	Stockholders Equity	Revenue		Expense	=	Net Income
A.	(2,500)		n/a		(2,500)	n/a		2,500		(2,500)	n/a
B.	(2,500)		(2,500)		n/a	n/a		n/a		n/a	n/a
C.	n/a		(2,500)		2,500	2,500		n/a		2,500	n/a
D.	(2,500)		n/a		(2,500)	n/a		2,500		(2,500)	(2,500)

Multiple Choice

Option D

Option A

Option B

Option C