Question $30$

$1\mathrm{.}5$ pts

When preparing a statement of changes in financial position using the cash basis for defining funds, an increase in ending inventory over beginning inventory will result in an adjustment to reported net earnings because

All changes in noncash accounts must be disclosed under the all financial resources concept

The net increase in inventory reduced cost of goods sold but represents an assumed use of cash

Funds were increased since inventory is a current asset

Inventory is an expense deducted in computing net earnings, but is not a use of funds