True or False Questions Statements 1. Unlike merchandising companies, income statements of service companies include cost of goods sold as a line item. 2. The primary activity of manufacturing businesses is to purchase goods from a wholesaler and resell them. 3. Service companies include companies that provide health care, communication, banking, and other important benefits to society.
True or False Questions Statements 1. Unlike merchandising companies, income statements of service companies include cost of goods sold as a line item. 2. The primary activity of manufacturing businesses is to purchase goods from a wholesaler and resell them. 3. Service companies include companies that provide health care, communication, banking, and other important benefits to society.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
True or False Questions
Statements
1. Unlike merchandising companies, income statements
of service
companies include cost of goods sold as a line item.
2. The primary activity of manufacturing businesses is to purchase goods
from a wholesaler and resell them.
3. Service companies include companies that provide health care,
communication, banking, and other important benefits to society.
4. Merchandising companies, like service companies, do not have a Cost
of Goods Sold account.
5. Period costs, such as office supplies, are expensed in the period they
were incurred.
6. Product costs are first recorded as an asset in an inventory account and
are expensed as cost of goods sold once the product is sold.
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