Accounting for inventories is a major consideration for many companies because of its significance to which of the following financial statements?
A)Balance sheet.
B)Income statement.
C)Accounts receivable statement.
D)Both A and B.

Question

Quizplus · Accepted Answer

Accounting for inventories impacts the balance sheet (through inventory valuation) and the income statement (through cost of goods sold and gross profit calculation). Therefore, the correct choice is D - Both A and B. The accounts receivable statement is not impacted by inventory accounting.

Accounting for Inventories Is a Major Consideration for Many Companies