The accountant for the Lintz Sales Company is preparing the income statement for

Question

The accountant for the Lintz Sales Company is preparing the income statement for 2012 and the balance sheet at December 31, 2012. The January 1, 2012 merchandise inventory balance will appear (under periodic Inventory Method)

A) only as an asset on the balance sheet
B) only in the cost of goods sold section of the income statement
C) as a deduction in the cost of goods sold section of the income statement and as a current asset on the balance sheet
D) as an addition in the cost of goods sold section of the income statement and as a current asset on the balance sheet

Explanation / Answer

C) as a deduction in the cost of goods sold section of the income statement and as a current asset on the balance sheet

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