Why Are Inventories Included in the Computation of Net Income

question 30

Multiple Choice

Why are inventories included in the computation of net income?

• A) To determine cost of goods sold.
• B) To determine sales revenue.
• C) To determine merchandise returns.
• D) Inventories are not included in the computation of net income.

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Definitions:

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Equally Distributed

A situation or condition in which resources, wealth, or opportunities are shared evenly amongst all participants or members of a group.

Program

A set of planned activities or instructions designed to achieve a specific outcome, which can be implemented through software in computing or policy in government and organizations.