Valuation of inventory and measurement of income

Reference no: EM13953416

Explain the relationship between the valuation of inventory and the measurement of income.

Inventory costs ultimately become the cost of goods sold reflected in the income statement.
Since inventory is not expensed as the cost of goods sold until merchandise is sold, determining which costs belong in inventory affects the timing of when these expenses are reflected in net income.

Reference no: EM13953416

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