For Each of the Following, Identify in Column 1 the Category

question 71

Essay

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, and in Column 3 the financial statement that the account in which the account balance is reported.
- $\begin{array} { | l | l | l | l | } \hline & \text { Column } 1 & \text { Column } 2 & \text { Column } 3 \\\hline \begin{array} { l } \text { Merchandise } \\\text { Inventory }\end{array} & & & \\\hline\end{array}$

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Definitions:

Operating Expense

Refers to the costs associated with the day-to-day functions of a business, excluding costs related to production.

Credit Terms

Conditions under which a seller will extend credit to a buyer, including repayment periods and interest rates.

Merchandise Return

Occurs when customers return previously purchased products to the seller, typically resulting in a refund or store credit.

Account Settlement

The process of reconciling and closing an account by paying off any outstanding balance.