Transactions that affect inventories on hand have an effect on both the balance sheet and the income statement.

Name: Transactions that affect inventories on hand have an effect on both the balance sheet and the income statement.
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Question

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Transactions that affect inventories on hand, such as purchases, sales, and adjustments, will impact the balance sheet by increasing or decreasing the inventory asset account. They will also affect the income statement by changing the cost of goods sold and gross profit.

Transactions That Affect Inventories on Hand Have an Effect on Both