The measurement of inventory affects both the balance sheet and the income statement within an accounting period.
BT: Comprehension

Question

Quizplus · Accepted Answer

This statement is true. The balance sheet reflects the value of inventory as an asset, and the income statement reflects the cost of goods sold, which is calculated based on the change in inventory levels during the accounting period. Therefore, the measurement of inventory has an impact on both financial statements.

The Measurement of Inventory Affects Both the Balance Sheet and the Income