Match the Inventory-Related Accounts to Costs That May Be Included

question 130

Multiple Choice

Match the inventory-related accounts to costs that may be included in inventories for retailers and manufacturers.
-Costs of direct materials, overhead, and direct labor used in unfinished goods.

• A)Merchandise Inventory
• B)Raw Materials
• C)Work in Process
• D)Finished Goods
• E)Cost of Goods Sold

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Definitions:

Callable Bonds

Bonds that can be redeemed by the issuer before their maturity date at a specified call price, allowing issuers to refinance debt if interest rates decline.

Fair Market Price

The price that a willing buyer and a willing seller agree upon, assuming both parties have reasonable knowledge of the item's relevance and are under no pressure to buy or sell.

Loss On Redemption

The loss incurred when a debt obligation or security is redeemed before its maturity date at a value less than the original purchase price or par value.

Carrying Amount

The balance of the bonds payable account (face amount of the bonds) less any unamortized discount or plus any unamortized premium.