Inventory is not an income statement account. ... An increase in inventory will be subtracted from a company's purchases of goods, while a decrease in inventory will be added to a company's purchase of goods to arrive at the cost of goods sold.
A company's inventory typically involves goods in three stages of production: raw goods, in-progress goods, and finished goods that are ready for sale. Inventory accounting will assign values to the items in each of these three processes and record them as company assets.
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Answer:
Inventory is not an income statement account. ... An increase in inventory will be subtracted from a company's purchases of goods, while a decrease in inventory will be added to a company's purchase of goods to arrive at the cost of goods sold.
A company's inventory typically involves goods in three stages of production: raw goods, in-progress goods, and finished goods that are ready for sale. Inventory accounting will assign values to the items in each of these three processes and record them as company assets.
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