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Accounting Chapter 10: Merchandising Business Inventory

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Accounting Chapter 10: Merchandising Business Inventory

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Questions and Answers

What type of account is the Sales account classified as in a merchandising business?

Expense account

Asset account

Liability account

Revenue account (correct)

What is the purpose of the Freight-in account in a merchandising business?

To record transportation charges on outgoing goods

To record transportation charges on incoming goods (correct)

To record purchases returns

To record sales returns

In the periodic inventory system, when does the physical inventory count take place?

At the end of each sale

At the end of the fiscal period (correct)

At the beginning of each sale

At the beginning of the fiscal period

What is the impact of a sale on physical inventory in the periodic inventory system?

No entry is made Signup and view all the answers

What is included in the calculation of cost of goods sold?

Freight-in Signup and view all the answers

Where is the Purchases account typically found in a ledger?

Expense section Signup and view all the answers

What is the purpose of the Merchandise Inventory account?

To record the beginning inventory of a period Signup and view all the answers

What is the difference between Freight-in and Delivery Expenses?

Freight-in is for incoming goods, while Delivery Expenses is for outgoing goods Signup and view all the answers

What is the accounting entry for purchases on credit?

Purchases $$$ HST Recoverable $$$ Bank Signup and view all the answers

What is the purpose of the Merchandise Inventory account at the end of the fiscal period?

To become the beginning inventory of the next period Signup and view all the answers