If a multiple$-$step income statement for $2021$ and the balance sheet at December $31,2021$ are being prepared, which of the following

is true of the merchandise inventory balance on January $1,2021?$

The merchandise inventory balance will not appear as an asset on the balance sheet.

The merchandise inventory balance will not appear in the cost of goods sold section of the income statement.

The merchandise inventory balance will appear as a deduction in the cost of goods sold section of the income statement and

as a current asset on the balance sheet.

The merchandise inventory balance will appear as an addition in the cost of goods sold section of the income statement and

as a current asset on the balance sheet.