Which of the Following Statements Are True Regarding the Closing

question 21

Multiple Choice

Which of the following statements are true regarding the closing process of a merchandiser?

• A)Sales Discounts,Sales Returns and Allowances and Cost of Goods sold should all be credited during closing
• B)Sales Discounts,Sales Returns and Allowances and Cost of Goods sold should all be debited during closing
• C)Sales Discounts and Sales Returns and Allowances should be debited; Cost of Goods Sold should be credited during closing
• D)Sales Discounts and Sales Returns and Allowances should be credited; Cost of Goods Sold should be debited during closing
• E)Sales Discounts and Sales Returns and Allowances are not closed.Cost of Goods Sold should be credited

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Definitions:

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including the cost of the materials and labor used to create the product.

Inventory

The total value of a company's raw materials, work-in-process, and finished goods that are considered a current asset on the balance sheet.

FIFO Method

"First In, First Out," an inventory valuation method where goods first purchased or produced are the first to be sold or used.

Inventory Records

Documentation that tracks the quantity, purchase costs, and sale prices of products available for sale, crucial for accurate inventory management and financial reporting.