True / False Questions
111. Retail companies sell goods primarily to other businesses.
112. Merchandising businesses include retail companies and wholesale companies.
113. Selling and administrative costs are product costs.
114. A company's cost of goods sold for a period equals the beginning inventory plus the amount of inventory purchased during the period.
115. The ending Merchandise Inventory plus Cost of Goods Sold equals the Cost of Goods Available for Sale during the period.
116. Costs included in the Merchandise Inventory account are product costs.
117. Selling and administrative costs are recognized as expenses in the period incurred.
118. Gross margin is equal to the amount of change (increase or decrease) in Merchandise Inventory during a period.
119. A perpetual inventory system updates the Merchandise Inventory account for all purchases of inventory but not for returns of inventory.
120. With a perpetual inventory system, the cost of merchandise inventory is recognized at the time of sale.