Question

which of the following statements regarding the schedule of cost of goods manufactured and sold is correct?
multiple choice
the schedule of cost of goods manufactured and sold shows the amount of cash paid for raw materials.
the schedule is an internal document, which is not presented with the companys financial statements.
the schedule of cost of goods manufactured and sold reports the amount of direct raw materials used during the period.
the schedule is an internal document, which is not presented with the companys financial statements, and, in addition, the schedule of cost of goods manufactured and sold reports the amount of direct raw materials used during

Explanation:

The schedule of cost of goods manufactured and sold is an internal document. It is not a part of the company’s external financial statements which are presented to external stakeholders like investors, creditors etc. The first option is wrong as it shows the cost of raw materials used (not cash paid). The third option is too narrow as the schedule includes more than just direct raw - materials used (it also has conversion costs etc.). The fourth option is a combination of wrong parts from the first and second options.

Answer:

The schedule is an internal document, which is not presented with the company’s financial statements.