MBA 5100- Exam 1 Study Guide
Solutions
Manufacturing business - ANSWER✔✔-buys raw materials, uses labor
and machinery to transform them into finished products, and sells the
finished products to individuals or other businesses
Merchandising business - ANSWER✔✔-buys finished products made by
other businesses and resells them to individuals or other businesses
Service business - ANSWER✔✔-provides intangible services, rather than
tangible products
Manufacturing (cars and trucks) - ANSWER✔✔-General Motors is what
type of business
Merchandising - ANSWER✔✔-Walmart is what type of business
Service - ANSWER✔✔-Delta Airlines is what type of business
Copyright ©EMILLYCHARLOTE 2025 ACADEMIC YEAR, ALL RIGHTS RESERVED. Page 1/17
,Merchandise inventory - ANSWER✔✔-On a merchandising firm's balance
sheet, what is included under current assets?
Inventories: raw materials, work in process, and finished goods -
ANSWER✔✔-On a manufacturing firms balance sheet, what is included
under current assets?
Raw materials (manufacturers inventory accounts) - ANSWER✔✔-
Materials waiting to be processed
Work in process (manufacturers inventory accounts) - ANSWER✔✔-
Materials partially completed or in the process of being completed
Finished goods (manufacturers inventory accounts) - ANSWER✔✔-
Completed products awaiting sale
Service revenues - cost of services sold - ANSWER✔✔-Service firm's gross
margin equation
Cost of services sold: Service firm - ANSWER✔✔-Cost of billable hours
Sales revenue - cost of goods sold - ANSWER✔✔-Merchandising firm's
gross margin equation
Copyright ©EMILLYCHARLOTE 2025 ACADEMIC YEAR, ALL RIGHTS RESERVED. Page 2/17
, Cost of goods sold: Merchandising firm - ANSWER✔✔-Costs incurred to
purchase the goods sold
Sales revenue - cost of goods sold - ANSWER✔✔-Manufacturing firm's
gross margin equation
Cost of goods sold: Manufacturing firm - ANSWER✔✔-Costs incurred to
manufacture finished product
False - ANSWER✔✔-True or False: Service companies have work-in
process and finished goods inventory, wherein costs are stored before
being transferred to cost of goods sold account
Sole Proprietorship - ANSWER✔✔-a business owned and managed by a
single individual
Partnership - ANSWER✔✔-a business owned by two or more people
True - ANSWER✔✔-True or false: In all 50 states, Partnerships are
automatically dissolved upon death of a partner
Corporations - ANSWER✔✔-Ownership divided into units, called "shares
of capital" or "common stock"
Copyright ©EMILLYCHARLOTE 2025 ACADEMIC YEAR, ALL RIGHTS RESERVED. Page 3/17
Solutions
Manufacturing business - ANSWER✔✔-buys raw materials, uses labor
and machinery to transform them into finished products, and sells the
finished products to individuals or other businesses
Merchandising business - ANSWER✔✔-buys finished products made by
other businesses and resells them to individuals or other businesses
Service business - ANSWER✔✔-provides intangible services, rather than
tangible products
Manufacturing (cars and trucks) - ANSWER✔✔-General Motors is what
type of business
Merchandising - ANSWER✔✔-Walmart is what type of business
Service - ANSWER✔✔-Delta Airlines is what type of business
Copyright ©EMILLYCHARLOTE 2025 ACADEMIC YEAR, ALL RIGHTS RESERVED. Page 1/17
,Merchandise inventory - ANSWER✔✔-On a merchandising firm's balance
sheet, what is included under current assets?
Inventories: raw materials, work in process, and finished goods -
ANSWER✔✔-On a manufacturing firms balance sheet, what is included
under current assets?
Raw materials (manufacturers inventory accounts) - ANSWER✔✔-
Materials waiting to be processed
Work in process (manufacturers inventory accounts) - ANSWER✔✔-
Materials partially completed or in the process of being completed
Finished goods (manufacturers inventory accounts) - ANSWER✔✔-
Completed products awaiting sale
Service revenues - cost of services sold - ANSWER✔✔-Service firm's gross
margin equation
Cost of services sold: Service firm - ANSWER✔✔-Cost of billable hours
Sales revenue - cost of goods sold - ANSWER✔✔-Merchandising firm's
gross margin equation
Copyright ©EMILLYCHARLOTE 2025 ACADEMIC YEAR, ALL RIGHTS RESERVED. Page 2/17
, Cost of goods sold: Merchandising firm - ANSWER✔✔-Costs incurred to
purchase the goods sold
Sales revenue - cost of goods sold - ANSWER✔✔-Manufacturing firm's
gross margin equation
Cost of goods sold: Manufacturing firm - ANSWER✔✔-Costs incurred to
manufacture finished product
False - ANSWER✔✔-True or False: Service companies have work-in
process and finished goods inventory, wherein costs are stored before
being transferred to cost of goods sold account
Sole Proprietorship - ANSWER✔✔-a business owned and managed by a
single individual
Partnership - ANSWER✔✔-a business owned by two or more people
True - ANSWER✔✔-True or false: In all 50 states, Partnerships are
automatically dissolved upon death of a partner
Corporations - ANSWER✔✔-Ownership divided into units, called "shares
of capital" or "common stock"
Copyright ©EMILLYCHARLOTE 2025 ACADEMIC YEAR, ALL RIGHTS RESERVED. Page 3/17
