When Recording the Sale of Merchandise Inventory,using a Periodic Inventory

question 195

Multiple Choice

When recording the sale of merchandise inventory,using a periodic inventory system,________.

• A)a running record of merchandise inventory is maintained during the accounting period
• B)the Sales Revenue account is credited only as an adjusting entry because sales information is not needed during the accounting period
• C)sales discounts and sales returns and allowances are not recorded
• D)there is no need to record an entry to the Merchandise Inventory and the Cost of Goods Sold accounts

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Definitions:

Perfectly Competitive Markets

Markets in which no individual buyer or seller has any significant impact on prices and products are perfect substitutes.

Minimum ATC

The lowest point on the Average Total Cost curve, indicating the most efficient scale of production for a firm in the long run.

Economic Profit

Profits earned by a firm or an individual after subtracting both the explicit costs and opportunity costs of resources employed.

Short Run

A time period in which at least one factor of production is fixed and cannot be changed, contrasting with the long run where all factors are variable.