Periodic inventory system basics

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The accountant for the Orion Sales Company is preparing the income statement for 2007 and the balance sheet at December 31, 2007. Orion uses the periodic inventory system. The January 1, 2007 merchandise inventory balance will appear:

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.

Reference no: EM13149807

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