The Value of Goods Added to a Firm's Inventory in a Certain

question 156

Multiple Choice

The value of goods added to a firm's inventory in a certain year is treated as

• A)consumption, since the goods will be sold to consumers in another period.
• B)intermediate goods, and so is not included in that year's GDP.
• C)investment, since GDP aims to measure the value of the economy's production that year.
• D)spending on durable goods, since the goods could not be inventoried unless they were durable.

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Definitions:

Managerial Accounting

Refers to the process of identifying, measuring, analyzing, interpreting, and communicating information for the pursuit of an organization's goals.

Objective

A specific, measurable, achievable, relevant, and time-bound goal that drives strategic and operational planning.

Internal Users

Internal users are individuals within an organization, such as management and employees, who use financial information to make decisions about the operations and future direction of the company.

External Users

Individuals or organizations outside of a company who have an interest in the company's financial information, such as investors, creditors, and regulatory bodies.