The Accountant for the Pryor Sales Company Is Preparing the Income

question 155

Multiple Choice

The accountant for the Pryor Sales Company is preparing the income statement for 2014 and the balance sheet at December 31, 2014. Pryor uses the periodic inventory system. The January 1, 2014 merchandise inventory balance will appear

• A) only as an asset on the balance sheet.
• B) only in the cost of goods sold section of the income statement.
• C) as a deduction in the cost of goods sold section of the income statement and as a current asset on the balance sheet.
• D) as an addition in the cost of goods sold section of the income statement and as a current asset on the balance sheet.

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Definitions:

Common Language

A language that is mutually understood and used by people who have different native languages, facilitating communication and cooperation.

Mental Demands

Refers to the cognitive efforts required by a job, including thinking, decision making, calculating, and remembering.

Memorization

The process of committing something to memory or learning information by heart.

Compressed Workweek

A work schedule that allows employees to work the standard number of weekly hours in fewer days, often resulting in extended workdays and a shorter workweek.