Which of the Following Accounts Will Not Be Found in the Cost

question 195

Multiple Choice

Which of the following accounts will not be found in the cost of merchandise sold section of the income statement for a company using the periodic inventory method?

• A) Purchases
• B) Freight In
• C) Selling Expense
• D) Merchandise Inventory

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Definitions:

Permanent Account

An account that is not closed at the end of the accounting period and its balances are carried forward into the next period.

Temporary Account

An account used in accounting that is closed at the end of each accounting period, transferring its balance to a permanent account.

Cash Sales

Transactions where payment for goods or services is made at the time of sale in cash or equivalent forms.

Credit Sales

Sales made by a business where payment is delayed, allowing the customer to purchase goods or services on account.