The inventory cost flow assumption describes the flow of product cost:
A) from the warehouse to the customer.
B) into the asset (inventory) account and out to the expense (cost of goods sold) account.
C) into the revenue (sales) account and out to the expense (cost of goods sold) account.
D) into the asset (inventory) account and out to the revenue (sales) account.

Question

Quizplus · Accepted Answer

The inventory cost flow assumption describes how costs move from being recorded as inventory (an asset) to being recognized as cost of goods sold (an expense) when the inventory is sold.

The Inventory Cost Flow Assumption Describes the Flow of Product