The inventory amount has no effect on net income.

Name: The inventory amount has no effect on net income.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The inventory amount can have an effect on net income through the cost of goods sold calculation. If the cost of goods sold is calculated using an inventory valuation method such as LIFO or FIFO, the amount of inventory on hand can have a significant impact on the cost of goods sold and, ultimately, the net income.

The Inventory Amount Has No Effect on Net Income