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:

Antibiotics

Drugs used to treat bacterial infections by killing or inhibiting the growth of bacteria.

Osteomyelitis

An infection in a bone, which can reach a bone by traveling through the bloodstream or spreading from nearby tissue.

Analgesics

Medications designed to reduce or eliminate pain without causing loss of consciousness, often referred to as painkillers.

Gastroscopy

A diagnostic procedure using a gastrocope to visually examine the inner lining of the upper gastrointestinal tract, including the esophagus, stomach, and duodenum.