For a merchandising company:

Question

Quizplus · Accepted Answer

In a merchandising company, the income statement reports the cost of the inventory sold during the period. This is because the cost of goods sold is a major expense in the company's operations, and it directly affects the calculation of gross profit and net income. A and C are incorrect as the balance sheet reports the cost of the inventory that is currently on hand (ending inventory), not the beginning of the period. D is incorrect as inventory is typically a significant factor in the operations of a merchandising company.

For a Merchandising Company