On the income statement of a manufacturing company, what replaces purchases in the Cost of goods sold section of a retail company?
A) finished goods
B) cost of merchandise available
C) cost of goods manufactured
D) work in process

Question

Quizplus · Accepted Answer

Since a manufacturing company produces its own goods instead of buying them from a supplier (like a retail company), the cost of the goods that were produced during the accounting period (known as the cost of goods manufactured) replaces purchases in the Cost of goods sold section of the income statement.

On the Income Statement of a Manufacturing Company, What Replaces