Video Packet Work 1.2 (Var vs Abs.)

The basic comprehension of the relationship of inventory on the balance sheet and COGS as an expense on the income statement is a key concept for this class. For merchandising companies and their Inventory account, all of the following are true except________ Multiple Choice .

A. If the company's inventory balance begins the year with a positive debit balance and ends the year at zero, the company must not have sold any inventory during the year.

B. An increase in the inventory balance from the beginning of the year to the end of the year would mean that the company has purchased more inventory than they sold.

C. If the company's inventory balance begins the year at zero and ends the year with a debit balance, the company must have purchased more inventory than they sold.

D. A decrease in the inventory balance from the beginning of the year to the end of the year would mean that the company has sold more inventory than they purchased.

which statement is False?