On the balance sheet,the inventory process includes which of the following accounts?
A)cost of goods sold
B)administrative expenses
C)inventory
D)allowance account for LIFO adjustments
E)allowance account for FIFO adjustments
F)both A and B
G)both C and D

Question

Quizplus · Accepted Answer

The inventory process involves maintaining a record of inventory on the balance sheet. Therefore, the account "inventory" is included in the inventory process. Additionally, the cost of goods sold is a financial statement item that is calculated based on changes in the inventory balances. This calculation requires knowledge of inventory levels and costs, which makes it a part of the inventory process. Finally, the allowance account for LIFO adjustments is an account that is maintained to reflect changes in inventory valuations due to the use of the LIFO inventory costing method. Thus, the best choice is option G, which includes both C and D. The allowance account for FIFO adjustments is not necessary for the inventory process, as it is used to reflect changes in inventory valuations due to the use of the FIFO method, which is an alternative inventory costing method.

On the Balance Sheet,the Inventory Process Includes Which of the Following