Select all that apply Demonstrate how inventory costs are treated both as assets and expenses by selecting the correct statement(s) below. (Check all that apply.) Multiple select question. Inventory items retained at the end of the period are considered part of Merchandise Inventory on the balance sheet. Inventory costs are initially treated as an expense when they are purchased. Inventory items sold are considered part of cost of goods sold on the income statement. Inventory costs are treated as an asset when they are sold. Inventory costs are treated as an expense when they are sold.