Assume all inventory items are purchased for cash.If cash payments for inventory in the period total $37 000 and the cost of sales,calculated under the accrual basis,is $40 000:

Question

Quizplus · Accepted Answer

Inventory on hand has decreased by $3,000 during the period because the cost of sales ($40,000) is higher than the cash payments for inventory ($37,000), indicating that more inventory was sold than purchased.

Assume All Inventory Items Are Purchased for Cash