Which of the Following Are Common Classifications for Inventories in the Financial

question 13

Multiple Choice

Which of the following are common classifications for inventories in the financial statements: $\begin{array}{lllll}&I.&II.&III.&IV\\\text { Raw materials } & \text { No } & \text { Yes } & \text { No } & \text { Yes } \\\text { Finished goods } & \text { Yes } & \text { Yes } & \text { Yes } & \text { Yes } \\\text { Work in progress } & \text { No } & \text { No } & \text { Yes } & \text { Yes } \\\text { Assets held for resale } & \text { Yes } & \text { No } & \text { No } & \text { Yes }\end{array}$

• A) I.
• B) II.
• C) III.
• D) IV.

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Definitions:

Financial Errors

Mistakes in the accounting records that can distort the financial statements and mislead users.

Retained Earnings

The fraction of net earnings that is not allotted for dividends, but is retained by the company to reinvest in the core business activities or to pay off debts.

Annual Revenues

The total amount of money received by a company from its activities, such as sales of products or services, before any expenses are subtracted, within a fiscal year.

Expenses

The outflow of money to pay for goods, services, or assets, or the costs incurred in the operation of a business.