When Merchandise Is Bought for Resale, Which of the Following

question 10

Multiple Choice

When merchandise is bought for resale, which of the following accounts would be increased?

• A) Store Equipment
• B) Merchandise Inventory
• C) Accounts Payable
• D) Supplies Expense

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Definitions:

Gains

Increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases in liabilities.

GAAP

GAAP, which stands for Generally Accepted Accounting Principles, is a set of accounting standards and conventions that guide how financial statements are prepared and reported.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) that aims to ensure transparency and comparability of financial statements globally.

Expenses

Outflows of resources or incurring of liabilities from a company's operations, including costs for materials, labor, and overhead required to generate revenue.