True Or False?
The ending merchadise inventory for 2005 is the same as the beginning merchandise inventory for 2006..

True because the inventory on hand at the end of one period is equal to the beginning inventory at the beginning of the next period.

At Dec 31, 2005 you have an amount in Inventory. This is the endo of the reporting period.
On Jan1,2006 you should have the same amount of inventory. This is the start of the next reporting period.