1/ How is merchandise inventory nomarlly presented on a Balance sheet?

a. entered as miscellaneous expense

b. as a liability and entered just below payble

c. as an asset and entered just below receivable

d. as owner's equity, and amount is added to the owner's drawing account.

2/ What is the perpeptual inventory system?

a. only the costs of sales are recorded in the system

b. system is generally used by stores selling losts of small items

c. physical inventories is required at the end of each accounting periodd

d. system uses accounting records that continually disclose the amount of inventory that remains

3/ Given the following data for a machine purchased January 1,