For their opening day, Ashley and Cameron bought $40 of "premium pink lemonade mix" and paper cups, which constituted their
A) cash balance.
B) fixed assets.
C) inventories.
D) cost of goods sold.

Question

Quizplus · Accepted Answer

The "premium pink lemonade mix" and paper cups are materials and supplies that are purchased for future use in making lemonade, so they are considered inventories. The $40 spent on these items is an expense, but it is not part of the cost of goods sold because the lemonade has not yet been made and sold.

For Their Opening Day, Ashley and Cameron Bought $40 of "Premium