Inventory

[Deepak82]

Hi,

Now we move on to another topic ‘Inventory”. The question is given below. As usual I will post the answer shortly.

An inventory valuation method usually affects the following:

A the statement of financial position but not the cost of goods sold
B both the statement of comprehensive income and the statement of financial position
C the cost of goods sold but not the statement of financial position
D neither the statement of comprehensive income nor the statement of financial position

All the best!!!

[Deepak82]

Hi Guys..no answers yet..waiting for your replies!!

[hetal]

The inventory on hand at the end of the period appears as an asset in the balance sheet (SOFP) and is also taken into consideration in the income statement (SOCI) in order to determine cost of goods sold. Therefore, the method of their valuation will have an important effect on both SOFP and SOCI.

The answer is B.
Am i right?

[Deepak82]

Hi Hetal,

Yes you are definitely right..I appreciate your participation in the forum.

All the best for your studies.

Andrew