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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 (D) Signup and view all the answers

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

Freight-in (A) Signup and view all the answers

Where is the Purchases account typically found in a ledger?

Expense section (B) Signup and view all the answers

What is the purpose of the Merchandise Inventory account?

To record the beginning inventory of a period (B) 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 (C) Signup and view all the answers

What is the accounting entry for purchases on credit?

Purchases $$$ HST Recoverable $$$ Bank (C) 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 (C) Signup and view all the answers