Which Types of Inventories Does a Manufacturing Business Report on the Balance

question 149

Multiple Choice

Which types of inventories does a manufacturing business report on the balance sheet?

• A) finished goods inventory and work in process inventory only
• B) direct materials inventory and work in process inventory only
• C) direct materials inventory, work in process inventory, and finished goods inventory
• D) direct materials inventory and finished goods inventory only

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Definitions:

Business Combinations

Transactions or events in which an acquirer obtains control over one or more businesses.

Acquisition

The process by which one company takes control over another company, either through direct purchase, merger, or management control.

Stockholders' Equity

The ownership interest represented by the value of a corporation's assets minus its liabilities.

Initial Value Method

An accounting practice where an investment is recorded at its original purchase cost.