Certain Merchandise That a Firm May Acquire May Be Inventory

question 21

Essay

Certain merchandise that a firm may acquire may be inventory or supplies.Accounting treats them differently as to the matching criteria used.
Required:
a. Describe the situation where merchandise would be considered inventory. How would the firm account for the costs of the merchandise?

b. Describe the situation where merchandise would be considered supplies. How would the firm account for the costs of the merchandise?

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Definitions:

Conclusion

The statement that logically follows from the premises in a logical argument, often signified by therefore.

Sample Variety

Refers to the diversity within a sample group in research, indicating a range of characteristics or attributes.

Generalization

A general idea or assertion derived from analyzing specific instances.

S Class

A category or model designation typically used to describe a luxury line of vehicles, often associated with Mercedes-Benz.