What occurs when inventoriable costs are removed from the balance sheet?
A)They increase operating expenses.
B)They become cost of goods sold.
C)They are reported as selling expenses.
D)They are deducted from the sales account.

Question

Quizplus · Accepted Answer

When inventoriable costs are removed from the balance sheet, they become the cost of goods sold. This reflects the cost of producing the goods sold during the period and is reported as an expense on the income statement. The cost of goods sold is calculated by subtracting the ending inventory balance from the sum of the beginning inventory balance and the cost of goods purchased or produced during the period.

What Occurs When Inventoriable Costs Are Removed from the Balance