Which of the following statements is correct? OOOOO Period costs are not included in the inventory accounts managed by a manufacturer. Work in process inventory in increased when product costs are either incurred or applied. The income statements for a merchandiser and a manufacturer look identical. Manufacturers account for three product cost categories: direct material, direct labor, and manufacturing overhead. All of the above statements are correct. Which of the following metrics indicates how much gross profit a merchandiser earns for each dollar of cost of goods sold recognized? OOOOO Operating income percentage Markup percentage Cost of goods sold percentage Gross profit percentage Sales revenue percentage Which of the following statements is correct concerning the operations of a merchandiser who chooses to use a perpetual inventory system? OOOOO The merchandiser would never need to be concerned about inventory shrinkage. The inventory records are, in theory, always up to date. Cost of goods sold can only be calculated after a physical inventory is completed. The merchandiser's markup percentage would be higher than if a periodic inventory system is used. The merchandiser is only allowed to use FIFO to calculate its ending inventory cost. Which of the following statements is correct? A purchase discount is calculated after subtracting returns and allowances from gross purchases. Under the accrual basis of accounting, a merchandiser should avoid adjusting for customer refunds, allowances, and returns. If a seller pays freight for an item shipped, FOB destination, the seller should seek reimbursement from the buyer. If a seller makes a sale under the term 2/10, net 30, the sales discount is only available if the buyer pays within the 30 day window. Freight in is not used in the calculation of net purchases. Which of the following statement is incorrect? OOOOO Merchandise inventory is considered a current asset. The income statement for a merchandiser differs in form from the income statement for a service company. Operating income is equal to gross profit minus selling, general, and administrative expenses. The operating cycle for a merchandiser includes a purchasing element. When merchandise is purchased for resell to customers, cost of goods sold is recorded