Inventory transactions affect

Name: Inventory transactions affect
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Inventory transactions affect both the balance sheet (in the inventory account) and the income statement (in the cost of goods sold account). When inventory is purchased, it is recorded as an asset on the balance sheet. When the inventory is sold, its cost is moved from the balance sheet to the income statement as cost of goods sold. This impacts the net income and ultimately affects the retained earnings on the balance sheet.

Inventory Transactions Affect