MGMT 200 CH6 Inventory and Cost of Goods Sold || WITH COMPLETE ANSWERS.
6 views 0 purchase
Course
Mgmt
Institution
Mgmt
Inventory correct answers Includes items a company intends for sale to customers in the ordinary course of business (includes items that are not yet finished products - reported as a CURRENT ASSET in the balance sheet)
- the amount the company reports is the cost of inventory NOT YET SOLD (at th...
MGMT 200 CH6 Inventory and Cost of Goods Sold ||
WITH COMPLETE ANSWERS.
Inventory correct answers Includes items a company intends for sale to customers in the
ordinary course of business (includes items that are not yet finished products - reported as a
CURRENT ASSET in the balance sheet)
- the amount the company reports is the cost of inventory NOT YET SOLD (at the end of the
period)
Cost of Goods Sold correct answers The cost of the inventory sold (reported as an expense in
the income statement)
Manufacturing Companies correct answers Produce the inventories they sell, rather than
buying them in finished form from suppliers (buy inputs for the products they manufacture)
Raw Materials correct answers Inventory includes the cost of components that will become
part of the finished product but have not yet been used in production
Work-in-process correct answers Inventory refers to the products that have been started in the
production process but are not yet complete at the end of the period
Overhead correct answers The total costs include raw materials, direct labor, and indirect
manufacturing costs
Finished Goods correct answers Inventory consists of items for which the manufacturing
process is complete
Merchandising Companies correct answers May assemble, sort, repackage, redistribute, store,
refrigerate, deliver, or install the inventory, but they do not manufacture it (they serve as
intermediaries in the process of moving inventory from the manufacturer to the end user)
Wholesalers correct answers Resell inventory to retail companies or to professional users
Retailers correct answers Purchase inventory from manufacturers or wholesalers and then sell
this inventory to end users
Multiple-step Income Statement correct answers Shows multiple levels of income (or profit)
Separates revenues and expenses into their different types, investors and creditors are better
able to determine the source of a company's profitability
Gross Profit correct answers First section of Multiple-step Income Statement
= Sales Revenue or Service Revenue - Cost of Goods Sold
Operating Income correct answers = Gross Profit - Operating Expenses (selling, general, and
administrative expenses)
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller ProPerfomer. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $8.99. You're not tied to anything after your purchase.
