Explain in detail about the merchandise inventory, Accounting Basics

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Explain in detail about the MERCHANDISE INVENTORY

Cost of merchandise purchased during an accounting period is debited to Purchases account. To determine VALUE of the goods on hand, it is essential to take an inventory-a physical count. Value of the goods on hand is then recorded in an ASSET account entitled MERCHANDISE INVENTORY.

Merchandise Inventory is decreased by the value of BEGINNING MERCHANDISE INVENTORY and it's increased by the value of ENDING MERCHANDISE INVENTORY.

 


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