Steps of Reporting Process The financial reporting process includes five steps: (1) identify the factors to be reported, (2) measure those factors, (3) classify and accumulate information by individual categories, (4) summarize the information assigned to each category, and (5) communicate the information to financial statement users. Assign each of the following actions taken by Pleasant Corporation to the appropriate step of the reporting process:

a. Compute the total amounts spent on labor and materials during the period and combine these amounts to determine the total cost of products sold during the period.

b. Determine which types of labor and materials costs should be combined and reported as cost of goods sold.

c. Develop an income statement that includes cost of goods sold and give a copy to Ralph Schmudge, who owns the company.

d. Record the dollar amounts of all payments for labor and materials made during the period.

e. Assign payments made to employees and suppliers to appropriate expense categories.