Which of the following statements regarding merchandise inventory is not true?
A. Merchandise inventory is reported on the balance sheet as a current asset.
B. Merchandise inventory may include the costs of freight-in and making them ready for sale.
C. Purchasing merchandise inventory is part of the operating cycle for a business.
D. Merchandise inventory refers to products a company owns and intends to sell.
E. Merchandise inventory appears on the balance sheet of a service company.
Answer: E
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