When does the cost of inventory become an expense? A. When cash is collected from the customer B. When inventory is purchased from the supplier C. When inventory is delivered to a customer D. When payment is made to the supplier

Question

Business

Janelle Harrison

13 March, 01:27

When does the cost of inventory become an expense? A. When cash is collected from the customer B. When inventory is purchased from the supplier C. When inventory is delivered to a customer D. When payment is made to the supplier

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Answers (1)

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Wiley · Answer 1

C. When inventory is delivered to a customer

Explanation:

As we know that the inventory is good that the company sold to the customers. Through these goods, the company can able to generate huge profits and gain a competitive advantage in the market

But when we talk about the inventory cost that converted into an expense is when we delivered the product to the customer. It would be represented in the company books as an expense. Until sold, it cannot be converted