A Merchandiser Uses a Perpetual Inventory System

question 54

Multiple Choice

A merchandiser uses a perpetual inventory system. The beginning Capital balance of a merchandiser was $100,000. During the year, sales revenue amounted to $75,000, sales returns and allowances were $1,000, sales discounts were $3,000, cost of goods sold was $40,000, and all other expenses totaled $10,000. The total withdrawals amounted to $25,000.The last step in the closing process would include:

• A)a debit to Income Summary for $54,000.
• B)a credit to Income Summary for $75,000.
• C)a debit to Owner's Name, Capital for $21,000.
• D)a debit to Owner's Name, Capital for $25,000.

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Definitions:

Walk-In Refrigerator

A large cooling unit or room that can be entered, commonly used in commercial kitchens for storing perishable goods.

Major Premise

In logic and rhetoric, the broader statement in a syllogism that provides the basis for the conclusion.

Direct Suggestion

A straightforward recommendation or proposal made to influence the thoughts, feelings, or actions of others, typically in sales.

Logical Reasoning

The process of using systematic thinking and applying logical steps to arrive at a conclusion or solve a problem.