The presentation of merchandise inventory and cost of goods sold in the financial statements of merchandising companies most nearly resembles the presentation of __________ inventory and cost of goods sold in the financial statements of manufacturing companies.
A) materials
B) finished goods
C) manufacturing supplies
D) work in process

Question

Quizplus · Accepted Answer

The presentation of merchandise inventory and cost of goods sold in the financial statements of merchandising companies is similar to the presentation of finished goods inventory and cost of goods sold in the financial statements of manufacturing companies. This is because both merchandising and manufacturing companies are involved in the sales of goods, with manufacturing companies being involved in the production of goods as well. The other options listed (materials, manufacturing supplies, work in process) are each specific to the manufacturing process and are not applicable to the presentation of merchandise inventory and cost of goods sold for merchandising companies.

The Presentation of Merchandise Inventory and Cost of Goods Sold