Message Font: Serif | Sans-Serif
No. of Recommendations: 0
The dollar value of unsold inventory does not increase income? Am I that far off base?

You're not far off on a bottom-line basis. But I don't like the explanation you used, as I think it leads to confusion rather than clarification.

I wouldn't say that unsold inventory increases income. It only increases income if you start from the incorrect position of having claimed your purchases as an expense. You never should have used unsold inventory to decrease income in the first place.

Technically, I'd call ending inventory a deferred expense. It will be an expense in the future, but it's not an expense yet.

Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.