Under the perpetual inventory system, when merchandise is sold, its cost is transferred from the MErchandise Inventory account to the Sales account. A) true B) false Which of the following is not considered a long-term obligation? A. deferred income taxes B. contributed capital C. capital lease D.pension liabilities. Solution B) False Because once it is sold, cost is transferred from the Merchandise Inventory account to cost of goods sold a/c. ________________________________________________________________________________ B) contributed capital deferred income taxes , capital lease, pension liabilities. all are considered as long term obligation it means willing to pay others but contributed capital is owner conributed the amount not to pay for others. As per equation= Assets = Liabilties + equity(capital) _________________________________________________________________________________ .