Where Should Raw Materials Be Classified on the Statement of Financial

question 11

Multiple Choice

Where should raw materials be classified on the statement of financial position?

• A) Prepaid expenses.
• B) Inventory.
• C) Equipment.
• D) Not on the statement of financial position.

---

Definitions:

Three Months Rent

An accounting entry typically categorized as a prepaid expense, representing payment for rent before it's due.

Closing Entry

Journal entries made at the end of an accounting period to transfer the balances of temporary accounts to a permanent equity account, thereby preparing the books for the next period.

Correct Closing Entry

Journal entries made at the end of an accounting period to transfer balances from temporary accounts to permanent accounts, thus preparing the books for the next period.

Adjusting Entry

Journal entries made in accounting records at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.