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:

Quartz

is a hard, crystalline mineral composed of silicon and oxygen atoms, one of the most abundant minerals in the Earth's crust.

Granite

Granite is a coarse-grained igneous rock comprised mainly of quartz, feldspar, and mica, known for its strength and widely used in construction and monuments.

Surface Area

The total area that the surface of an object occupies.

Fractured

Broken or cracked, often referring to rocks or geological features that have been subjected to stress leading to breakage.