Multiple Choice
Which of the following is a basic issue of inventory management in relation to Cost of Goods Sold under perpetual and periodic inventory systems?
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4. Merchandising Operations
Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory
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All of the following are inventory accounts for a manufacturer except:
A
Finished Goods
B
Work in Process
C
Merchandise Inventory
D
Raw Materials
Verified step by step guidance1
Understand the types of inventory accounts used by a manufacturer. Manufacturers typically have three main inventory accounts: Finished Goods, Work in Process, and Raw Materials.
Finished Goods represent completed products that are ready for sale but have not yet been sold.
Work in Process refers to products that are partially completed and still undergoing production processes.
Raw Materials are the basic inputs or materials used in the production process to create finished goods.
Merchandise Inventory is not an inventory account for a manufacturer. It is typically used by retailers or wholesalers who purchase finished goods for resale, rather than producing goods themselves.
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