Merchandising

There are two classes of merchandise inventory; the beginning and ending.

• True
• False

A merchandising business that usually has no beginning inventory is when it has just started.

• True
• False

Under the perpetual inventory system, increases and decreases in inventory are recorded through the purchases, freight-in, purchase returns, and purchase discounts accounts.

• True
• False

Purchase returns and discounts are deducted from gross purchases when computing for net purchases.

• True
• False

Under periodic inventory system, all increases and decreases in inventory, such as purchases, freight-in, purchase returns, purchase discounts, cost of goods sold, and sales returns are recorded in the Inventory account.

• True
• False

Trade discounts are recorded in the book of the business.

• True
• False

Under the merchandising concern, the business can be a buyer at one hand and a seller on the other hand.

• True
• False

The chart of accounts for merchandising concern is dissimilar to service concern.

• True
• False

Freight-out refers to transportation expense in buying merchandise from a supplier.

• True
• False

Beginning inventory minus net purchases equals total goods available for sale.

• True
• False