A seller of goods can easily associate (or match) the consumption of the benefits of the asset sold with revenues from its sale.At the time of sale and revenue recognition, the seller
A)removes the asset (inventory) from the seller's balance sheet.
B)recognizes revenue.
C)recognizes a reduction in an asset (inventory).
D)records the cost of goods sold expense in the same amount by which inventory decreases.
E)All of the answer choices are correct.

Question

Quizplus · Accepted Answer

All of the answer choices are correct. When a seller sells goods, they remove the asset (inventory) from their balance sheet, recognize revenue, recognize a reduction in inventory, and record the cost of goods sold expense in the same amount by which inventory decreases. This is done to match the consumption of the benefits of the asset sold with revenues from its sale.

A Seller of Goods Can Easily Associate (Or Match) the Consumption