Question

Refer to the balance sheet and income statement for Apple in Appendix A. What does the company title its inventory account? Does the company present a detailed calculation of its cost of goods sold?

Short answer

Apple reports its inventory account as inventories.

The intermediate calculation of the cost of goods sold is not reported.

Step-by-step solution

Definition of Cost of Goods Sold

The account reported in the income statement representing the cost incurred by the business entity to produce the goods that are sold is known as the cost of goods sold.

Title of the inventory account and intermediate calculation of the cost of goods sold

Apple uses the word “inventories” to report the inventory held in the business at the end of the fiscal year.

Apple does not report the intermediate calculation of the cost of goods sold in the income statement.