Balance Sheet Accounts

question 104

Multiple Choice

Balance sheet accounts

• A) represent amounts accumulated during a specific period of time
• B) are called real accounts
• C) have zero balances after the closing entries have been posted
• D) are equal to assets and liabilities

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Definitions:

Perpetual Inventory System

An inventory management approach where records of inventory levels are updated on a continuous basis as transactions occur.

Merchandise Inventory

Merchandise Inventory refers to the products a company has in stock that are ready to be sold, represented as an asset on the balance sheet.

Cost of Goods Sold

This is the direct costs attributable to the production of the goods sold in a company.

Perpetual Inventory System

An inventory management system where records of inventory quantities are updated on a continuous basis as transactions occur.