The Inventory System That Uses the Merchandise Inventory Account as an Asset

question 39

Multiple Choice

The inventory system that uses the merchandise inventory account as an asset account is called the:

• A)periodic system.
• B)perpetual system.
• C)merchandising system.
• D)Both inventory systems use the merchandise inventory account as an asset.

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Definitions:

Errors In Journalizing

Mistakes made during the process of recording transactions in the journal, which can include omission, duplication, or incorrect entries.

Owner's Drawings

These are the withdrawals of cash or other assets by the owner from the business for personal use.

Owner's Capital

The amount of equity in a company that belongs to the owner, including initial investment plus any retained earnings.

Salaries Expense

Represents the total amount paid to employees for services rendered during a particular period.