When Interim Accounting Reports Are Prepared on a Worksheet and the Periodic

question 3

Multiple Choice

When interim accounting reports are prepared on a worksheet and the periodic method of accounting for inventory is used, closing inventory is:

• A) recorded in the income statement debit column as a deduction from cost of sales and in the balance sheet debit column as a current asset.
• B) recorded in the income statement credit column as a deduction from cost of sales and in the balance sheet debit column as a current asset.
• C) not recorded.
• D) is recorded as a debit to the inventory asset account and as credit to the gross profit account.

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