When raw materials are purchased by a manufacturer, those costs will be recorded in the general ledger as:

A) cost of goods sold.
B) manufacturing costs.
C) inventory.
D) conversion costs.

Question

When raw materials are purchased by a manufacturer, those costs will be recorded in the general ledger as:A)  cost of goods sold.B)  manufacturing costs.C)  inventory.D)  conversion costs.

Aseel Alqurashi · Accepted Answer

Final Answer : C, Explanation :  Raw materials purchased by a manufacturer will be recorded in the general ledger as inventory until they are used in the manufacturing process. Therefore, option C is the correct choice. Cost of goods sold (option A) is not recorded until the finished goods are sold, and manufacturing costs (option B) include not only raw materials costs but also direct labor and overhead costs. Conversion costs (option D) are also part of manufacturing costs and include direct labor and overhead costs.

When raw materials are purchased by a manufacturer, those costs will be recorded in the general ledger as:

A) cost of goods sold.
B) manufacturing costs.
C) inventory.
D) conversion costs.

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Learning Objectives

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