A company has inventory valued at \$200,000. The market value drops to \$190,000. How should the company record this change?

• A. Debit Loss from Write-down of Inventory \$190,000; Credit Inventory \$10,000
• B. Debit Loss from Write-down of Inventory \$10,000; Credit Inventory \$10,000
• C. Debit Inventory \$10,000; Credit Loss from Write-down of Inventory \$10,000
• D. Debit Inventory \$190,000; Credit Loss from Write-down of Inventory \$10,000

Answer: (B)