Chapter#2B: Types of Business Organizations

Question 1

What is a Service Company?

Answer 1

is a business that offers services to the public

Question 2

What Account does a service business not have?

Answer 2

Purchase account and no inventory is recorded

Question 3

What is a Merchandising business?

Answer 3

purchases products from it’s vendors for resale to its customers

Question 4

What must a merchandising business prepare?

Answer 4

it will include a section called the cost of Good’s sold

Question 5

What is a Manufacturing Organization

Answer 5

they transform raw materials into finished goods for sale.

Question 6

What are the three types of inventory

Answer 6

Raw material inventory
Work in process inventory
Finished goods inventory

Question 7

What is Raw Material Inventory

Answer 7

includes the costs of various items used to produce the goods made by the organization

Question 8

What is Work in Process Inventory?

Answer 8

includes all the costs of all products being made by a company that are not yet complete and ready to sell

Question 9

What is Finished Goods Inventory?

Answer 9

Includes the costs of all goods that are complete and ready for sale