COST ACCOUNTING
INTRODUCTION TO COST ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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only merchandise inventory
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only finished goods inventory
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direct materials inventory and finished goods inventory accounts only
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direct materials inventory, work-in-process inventory, and finished goods inventory accounts
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Detailed explanation-1: -A manufacturer’s inventory will be reported in the current assets section of the balance sheet and in the notes to the financial statements. In the current assets section the amount of the manufacturer’s inventory will be positioned after cash and cash equivalents, short-term investments, and receivables.
Detailed explanation-2: -Where is inventory on a balance sheet? Inventory should be near the top of your balance sheet since it’s likely one of your company’s most liquid assets. Whatever current asset is most easily converted into cash should be at the very top-and that’s almost certainly cash and cash equivalents themselves.
Detailed explanation-3: -In a manufacturing company balance sheet, manufacturing inventories are reported in the current assets section in the order of their expected use in production.
Detailed explanation-4: -The answer is c) accounts receivable, retained earnings, utilities payable, accumulated depreciation would all appear on the balance sheet.