nventory is reported on the ______. Later, when the inventory is sold, it becomes ______.Multiple choice question.income statement as Gross Profit; Cost of Goods Sold on the income statementincome statement as in transit inventory; Cost of Goods Sold on the balance sheetbalance sheet as a current asset; Cost of Goods Sold on the income statementbalance sheet as noncurrent asset; Gross Profit on the income statement
Question
nventory is reported on the ______. Later, when the inventory is sold, it becomes ______.Multiple choice question.income statement as Gross Profit; Cost of Goods Sold on the income statementincome statement as in transit inventory; Cost of Goods Sold on the balance sheetbalance sheet as a current asset; Cost of Goods Sold on the income statementbalance sheet as noncurrent asset; Gross Profit on the income statement
Solution
The correct answer is: "balance sheet as a current asset; Cost of Goods Sold on the income statement".
Here's why:
-
Inventory is a current asset that a company owns and intends to sell, so it is reported on the balance sheet under current assets.
-
When the inventory is sold, the cost associated with the inventory sold is reported as Cost of Goods Sold (COGS) on the income statement. This is because COGS is an expense that directly relates to the production of the goods sold by a company.
Similar Questions
nventory is reported as a(n) ______.Multiple choice question.expense on the income statementcurrent asset on the balance sheetnoncurrent asset on the balance sheetexpense on the balance sheetcurrent asset on the income statement
Where is inventory reported in the financial statements?Multiple choice question.Balance sheet as a current assetBalance sheet as a noncurrent assetStatement of cash flows as an investing activityIncome statement as revenue
Which of the following items appears only in a manufacturing company's financial statements?Multiple ChoiceGross profit.Net income.Inventory.Cost of goods sold.Cost of goods manufactured.
The income statement shows ______.Multiple choice question.a firm's assets, liabilities, and stockholders equityinflows and outflows of casha firm's profit (or loss) after costs, expenses, and taxesthe basic accounting equation
A company's net sales minus cost of goods sold is called Blank______.Multiple choice question.gross profitstockholders equitynet incomeretained earnings
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.