Which Statement Below Best Describes How to Account for the Costs

question 232

Multiple Choice

Which statement below best describes how to account for the costs of purchasing inventory?

• A)The costs are initially recorded as expenses and depreciated over the estimated useful life.
• B)Inventory costs are initially reported as assets and then maintained in the asset accounts for the life of the business.
• C)The costs are initially recorded as assets and become expenses when the inventory has an increase in market value.
• D)The costs are initially recorded as assets and become expenses when the inventory is sold.

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