Cost of goods sold is an asset reported in the balance sheet and inventory is an expense reported in the income statement. 17 O True O False 2 1 If a company has beginning inventory of $15,000, purchases during the year of $75,000, and ending inventory of $20,000, cost of goods sold equals $70,000 True False 3 1 For most companies, actual physical flow of their inventory follows LIFO.I True O False