Complete the following statement. Merchandise inventory that is still available for sale is considered a(n) (asset/expense/revenue) and is reported on the (balance sheet/income statement) and merchandise that is sold during the period is considered a(n) (asset/expense/liability) and reported on the (balance sheet/income statement).

The answer is:

Asset, balance sheet

Expense, income statement.

Explanation:

Merchandise inventory that is still available for sale is considered an ASSET and is reported on the BALANCE SHEET and merchandise that is sold during the period is considered an EXPENSE and reported on the INCOME STATEMENT.

Inventories are found in the balance sheet. They are current asset. It is an asset because the merchandiser still owns and controls it and it will generate future economic benefit for the entity.

While the ones that are sold are called expense.