Ferguson Company sold goods that had cost $950 to manufacture.How does this transaction affect the financial statements? $\begin{array}{|c|c|c|c|c|c|c|c|c|c|}
\hline {\text { Assets }} & = & \text { Liab. } & + & \text { Equity } & \text { Rev. } & - & \text { Exp. } & = & \text { Net Inc. } \
\hline
\end{array}$

Question

Quizplus · Accepted Answer

The cost of goods sold (COGS) is an expense, reducing equity and net income by $950. Assets decrease by $950 as inventory is sold.

Ferguson Company Sold Goods That Had Cost $950 to Manufacture