会计学原理Finacial-Accounting-by-Robert-Libby第八版-第七章-答案.docxVIP

Chapter 07 - Reporting and Interpreting Cost of Goods Sold and Inventory Chapter 07 - Reporting and Interpreting Cost of Goods Sold and Inventory 7- PAGE \* MERGEFORMAT 16 Solutions Manual ? 2014 by McGraw-Hill Global Education Holdings, LLC. ?This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. ?This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Financial Accounting, 8/e 7- PAGE \* MERGEFORMAT 15 ? 2014 by McGraw-Hill Global Education Holdings, LLC. ?This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. ?This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. Chapter 7 Reporting and Interpreting Cost of Goods Sold and Inventory ANSWERS TO QUESTIONS 1. Inventory often is one of the largest amounts listed under assets on the balance sheet which means that it represents a significant amount of the resources available to the business. The inventory may be excessive in amount, which is a needless waste of resources; alternatively it may be too low, which may result in lost sales. Therefore, for internal users inventory control is very important. On the income statement, inventory exerts a direct impact on the amount of income. Therefore, statement users are interested particularly in the amount of this effect and the way in which inventory is measured. Because of its impact on both the balance sheet and the income statement, it is of particular interest to all statement users. 2. Fundamentally, inventory should include those items, and only those items, legally owned by the business. That is, inventory should include all goods that the company owns, regardless of their particular