Question

Q 6.40: Smithson Company, a furniture manufacturer, uses three inventory accounts. Rutherford Company, a merchandiser, only has one inventory account. Which account title do both companies list in their chart of accounts

Answer 1

Cost of Goods Sold

Step-by-step explanation:

The reason is that it doesn't matter how much softwares and systems the company uses to manage its accounts. At the end of the period the company will have to report all the direct costs associated with product that were sold during the period in the cost of goods sold in the Income Statement. So the account title listed in the charts of accounts which would be the sub-head of the inventory accounts.