Which of the following best fills in the blanks?

For a merchandising company, _____________ess _____________represents the total cost of items sold during the period, being called ….

Select one:

1) beginning inventory / cost of goods sold / ending inventory

2) cost of goods available for sale / cost of goods purchased / beginning inventory

3) cost of goods purchased / ending inventory / cost of goods sold

4) cost of goods available for sale / ending inventory / cost of goods sold

Which transaction impacts shareholders’ equity?

Select one:

1) Investment of cash by shareholders

2) purchase of equipment with money invested by shareholders

3) purchase of land from the proceeds of a bank loan

4) Investment in other firms’ shares

Below is a list of statements about inventory costing systems (FIFO, LIFO, weighted average cost) that are either true or false. Which of the answers best describes the sequence of statements?

• In the inflationary times, the costs of ending inventory based on FIFO will best approximate their current cost.
• In the inflationary times, the costs of goods sold based on FIFO is higher than LIFO.
• The application of the average-cost method leads to lowest tax expense

Select one:

1) True, False, False

2) False, True, False

3) True, False, True

4) False, True, True

The revenue recognition principle dictates that revenue should be recognized in the accounting records

Select one:

1) in the period that income taxes are paid.

2) at the end of the month.

3) when the performance obligation is satisfied.

4) when cash is received.