Certain merchandise that a firm may acquire may be inventory or supplies.Accounting treats them differently as to the matching criteria used.
Required:
a.Describe the situation where merchandise would be considered inventory. How would the firm account for the costs of the merchandise?
b.Describe the situation where merchandise would be considered supplies. How would the firm account for the costs of the merchandise?

Question

Certain merchandise that a firm may acquire may be inventory or supplies.Accounting treats them differently as to the matching criteria used.
Required:
 a.Describe the situation where merchandise would be considered inventory. How would the firm account for the costs of the merchandise?
b.Describe the situation where merchandise would be considered supplies. How would the firm account for the costs of the merchandise?

Quizplus · Accepted Answer

The Answer of Certain merchandise that a firm may acquire may be inventory or supplies.Accounting treats them differently as to the matching criteria used.
Required:
 a.Describe the situation where merchandise would be considered inventory. How would the firm account for the costs of the merchandise?
b.Describe the situation where merchandise would be considered supplies. How would the firm account for the costs of the merchandise?

Certain Merchandise That a Firm May Acquire May Be Inventory