The Operating Cycle of a Merchandiser Is

question 131

Multiple Choice

The operating cycle of a merchandiser is

• A) always one year in length.
• B) generally longer than it is for a service company.
• C) about the same as for a service company.
• D) generally shorter than it is for a service company.

Understand the perpetual and periodic inventory systems and their journal entries.

Identify the components and calculation of net income.

Analyze the similarities and differences in financial statements between service and retail businesses.

Understand the closing process and the accounts involved in closing entries.

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Definitions:

Straight-Line Method

An accounting method of depreciation in which an asset's cost is evenly spread over its useful life.

Actuaries

Professionals skilled in assessing the financial impact of risk and uncertainty, utilizing mathematics, statistics, and financial theory to study uncertain future events, especially in the insurance and finance industries.

Unrecognized Net Loss

Refers to losses that have occurred but have not been reported in the financial statements.

Projected Benefit Obligation

An actuarial estimate of the total retirement benefits, under a pension plan, that an employee has earned to date, based on expected future salary levels.