When preparing an unadjusted trial balance using a periodic inventory system,the amount shown for merchandise inventory is:
A)The ending inventory amount.
B)The beginning inventory amount.
C)Equal to the cost of goods sold.
D)Equal to the cost of goods purchased.
E)Equal to the gross profit.

Question

Quizplus · Accepted Answer

In a periodic inventory system, the merchandise inventory account is not updated continuously throughout the period. Instead, the beginning inventory balance is recorded at the start of the period and the ending inventory balance is determined at the end of the period through a physical count of the goods on hand. Therefore, the amount shown for merchandise inventory on an unadjusted trial balance will be the beginning inventory amount.

When Preparing an Unadjusted Trial Balance Using a Periodic Inventory