Which of the Following Statements About Merchandising Activities Is True

question 28

Multiple Choice

Which of the following statements about merchandising activities is true? (More than one answer may be correct)

• A) As inventory is purchased, the Inventory Expense account is debited and Cash (or Accounts Payable) is credited.
• B) Inventory is recorded as an asset when it is first purchased.
• C) As inventory is sold, its cost is transferred from the balance sheet to the income statement.
• D) As inventory is sold, its cost is transferred from the income statement to the balance sheet.

---

Definitions:

Morphemic Rules

Guidelines that govern the structure, organization, and relationship of morphemes in a language.

Phonemic Rules

Guidelines that determine how phonemes, the basic units of sound in a language, can be combined to produce words and affect pronunciation.

Grammar

The set of rules that govern the structure and composition of phrases and sentences in a language.

Linguistic Relativity

A principle suggesting that the structure of a language affects its speakers' world view or cognition.