Which of the following best describes inventory item linked accounts -

Question

Quizplus · Accepted Answer

When you purchase an inventory item, the asset account is debited because it represents an increase in the value of your assets. When you sell the inventory item, the revenue account is credited because it represents an increase in your revenue or sales. At the same time, the cost of goods sold account is debited because you are now reducing the asset value by the cost of the sold inventory item. Therefore, all of the above options (A, B, and C) are correct when describing inventory item linked accounts.

Which of the Following Best Describes Inventory Item Linked Accounts