Merchandise Inventory Quiz

What is merchandise inventory?

• Goods that are damaged

• Goods a business uses internally

• Goods that are donated

• Goods a business purchases to resell

How is merchandise inventory reported on the balance sheet?

• At estimated value

• At market value

• At cost

• At selling price

What does the unadjusted trial balance show?

• Adjusted balances

• Permanent accounts

• Opening inventory

• Closing inventory

What is the purpose of the adjusted trial balance?

• To show updated account balances

• To check if total debits = total credits

• To confirm permanent account balances

• To list temporary accounts

What accounts are included in the post-closing trial balance?

• Only permanent accounts

• Only temporary accounts

• Only cash and inventory

• Both temporary and permanent accounts

When is the unadjusted trial balance prepared?

• After adjustments

• Before adjustments

• Before journal entries

• After closing entries

What does the adjusted trial balance include?

• Only permanent accounts

• Only temporary accounts

• Adjusted balances of all accounts

• Only cash balances

What happens to temporary accounts in the post-closing trial balance?

• They are included

• They are reset to zero

• They are closed

• They are adjusted

What is the role of merchandise inventory in the trial balance?

• Shows total sales

• Shows opening inventory

• Shows equity

• Shows liabilities

What is the purpose of the trial balance?

• To calculate taxes

• To check for errors

• To prepare financial statements

• To determine profit