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Step 1 Dear student, as you have not mentioned the question number to be answered, so we are answering the first question for you as we can answer one question at a time. If you need help for other qu

1) Why is Cost of Goods Sold listed under revenues on the Income Statement if it is actually an expense?
2) Does it have a credit or debit balance?
3) What other if any statements does it appear on, and what accounts does it affect?

I am providing a sample question and if you could help explain it I would appreciate it.

"ABC International has a beginning balance in its inventory asset account of $500,000. It buys $450,000 of materials from suppliers during the month. At month-end, it counts its ending inventory and determines that there is $200,000 of inventory on hand. The cost of goods sold journal entry is:"

Debit Credit
Cost of Goods Sold $750,000

Purchases $450,000

Inventory $300,000

"This entry matches the ending balance in the inventory account to the costed actual ending inventory, while eliminating the $450,000 balance in the purchases account."

 

Sep 01 2020 Read more Less More

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