Transactions that affect inventories on hand have an effect on both the statement of financial position and the income statement.

Name: Transactions that affect inventories on hand have an effect on both the statement of financial position and the income statement.
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Question

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Transactions affecting inventories on hand are recorded as expenses or revenues on the income statement and as assets or liabilities on the statement of financial position. Therefore, these transactions affect both financial statements.

Transactions That Affect Inventories on Hand Have an Effect on Both