Chapter 7
MerChandising Corporation

assessment Questions as-1 ( 1 ) What is a merchandising business? A merchandising business can be defined as any business that buys and sells product for the ______________________________________________________________________________ purpose of making a profit. ______________________________________________________________________________ ______________________________________________________________________________ as-2 ( 1 ) What do common shares in a corporation represent? Common shares represent money invested directly in a company by its owners, who received ______________________________________________________________________________ shares of the company in return. ______________________________________________________________________________ ______________________________________________________________________________ as-3 ( 2 ) What does retained earnings in a corporation represent? Retained earnings represents all the profits that the business has retained (i.e. not paid to the ______________________________________________________________________________ owners). ______________________________________________________________________________ ______________________________________________________________________________ as-4 ( 3 ) In a perpetual inventory system, how often are inventory levels updated? A perpetual inventory system updates inventory levels after every purchase and sale. ______________________________________________________________________________ ______________________________________________________________________________

205

Chapter 7

Merchandising Corporation

as-5 ( 3 ) In a periodic inventory system, how often are inventory levels updated? A period inventory system only updates the inventory and cost of goods sold once the items