Multiple Choice
In managerial decision-making, service firms should focus on _____ costs.
19
views
4. Merchandising Operations
Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory
Struggling with Financial Accounting?
Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
Which of the following is NOT a type of inventory typically reported on a company's balance sheet?
A
Accounts receivable
B
Work in process
C
Raw materials
D
Finished goods
Verified step by step guidance1
Understand the concept of inventory: Inventory refers to the goods and materials a company holds for the purpose of resale or production. It is typically classified into categories such as raw materials, work in process, and finished goods.
Review the types of inventory: Raw materials are the basic inputs used in production. Work in process refers to partially completed goods still undergoing production. Finished goods are completed products ready for sale.
Identify accounts receivable: Accounts receivable represents money owed to the company by customers for goods or services already delivered. It is classified as a current asset but is not considered inventory.
Compare accounts receivable with inventory: While inventory is a physical asset related to production and sales, accounts receivable is a financial asset representing outstanding payments. This distinction is key to answering the question.
Conclude that accounts receivable is NOT a type of inventory: Based on the definitions and classifications, accounts receivable does not fall under the categories of inventory typically reported on a company's balance sheet.
3:41mWatch next
Master Cost of Goods Sold:Perpetual Inventory with a bite sized video explanation from Brian
Start learningRelated Videos
Related Practice
Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory practice set
Problem sets built by lead tutorsExpert video explanations