The following statements regarding merchandise inventory are true except: Multiple Choice Merchandise inventory refers to products a company owns and intends to sell. Merchandise inventory appears on the balance sheet of a service company. Purchasing merchandise inventory is part of the operating cycle for a business. Merchandise inventory may include the costs of freight in and making them ready for sale. Merchandise inventory is reported on the balance sheet as a current asset.

Question

Chessie

Business

3 August, 04:45

The following statements regarding merchandise inventory are true except: Multiple Choice Merchandise inventory refers to products a company owns and intends to sell. Merchandise inventory appears on the balance sheet of a service company. Purchasing merchandise inventory is part of the operating cycle for a business. Merchandise inventory may include the costs of freight in and making them ready for sale. Merchandise inventory is reported on the balance sheet as a current asset.

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Emmett · Answer 1

Merchandise inventory appears on the balance sheet of a service company.

Explanation:

A service company sells services, not goods. Services are intangible, therefore they cannot be stored, so there cannot exist an inventory of unused services.

Merchandise inventory includes the goods that a business owns and will try to sell, and buying and selling them is part of the business's normal activities. The cost of the goods included in the merchandise inventory may include freight costs and packaging costs, depending on what type of product they are selling. Merchandise inventory is a current asset account.