In a perpetual inventory system, the flow of inventory cost is first through the balance sheet then through the income statement.

Name: In a perpetual inventory system, the flow of inventory cost is first through the balance sheet then through the income statement.
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In a perpetual inventory system, inventory cost is first recorded on the balance sheet as an asset, then when the inventory is sold, the cost is transferred from the balance sheet to the income statement as cost of goods sold.

In a Perpetual Inventory System, the Flow of Inventory Cost