The assumption that a company makes about its inventory cost flow can affect cost of goods sold on its ________ and inventory on its ________ .
A)income statement;balance sheet
B)balance sheet;income statement
C)income statement;income statement
D)balance sheet;balance sheet

Question

Quizplus · Accepted Answer

Cost of goods sold is reported on the income statement and inventory is reported on the balance sheet,therefore,any assumptions a company would make about its inventory cost flow would affect those accounts and subsequently those financial statements.

The Assumption That a Company Makes About Its Inventory Cost