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As inventory and property plant and equipment on the balance sheet are consumed, they are reflected: Question 3 options: On the balance sheet because assets are never consumed As a use of cash on the statement of cash flows As an expense on the income statement Both an expense on the income statement and a use of cash on the statement of cash flows statements As a revenue on the income statement

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Answer: As an expense on the income statement

Explanation:

When assets are consumed, the consumption ends up as expenses in the income statement.

Inventory will end up as an expense in Cost of Goods sold which will then be subtracted from the revenue to determine the gross profit.

Consumption of Property, Plant and Equipment will end up as depreciation in the income statement which is a non-cash expense that will be subtracted along with other expenses to find the net income.

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