Raw Materials That Physically Become Part of the Product and Can

question 61

Multiple Choice

Raw materials that physically become part of the product and can be traced to specific units or batches of product are called:

• A) Raw materials sold.
• B) Chargeable materials.
• C) Goods in process.
• D) Indirect materials.
• E) Direct materials.

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Definitions:

Operating Cycle

An operating cycle is the average period of time it takes for a business to convert its inventory into cash proceeds from sales.

Receivables

Amounts owed to a company by customers for goods or services that have been delivered or used but not yet paid for.

Raw Materials

Basic materials and substances used in the initial production or manufacturing of goods.

Balance Sheet

A financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time.