Final answer:
All characteristics listed, including Merchandise Inventory being an asset, having a normal debit balance, and decreasing when returns occur, are correct.
Step-by-step explanation:
A characteristic of Merchandise Inventory is that it is an asset, decreases for the buyer when merchandise is returned, and it has a normal debit balance. Therefore, the correct answer to the question is D. All of the above are correct. Merchandise Inventory is an important part of a business's balance sheet. As an asset, it represents the value of the goods that the business has produced but not yet sold. The debit balance in the accounting books reflects the cost of inventory that has been purchased but not sold. When a buyer returns merchandise, the inventory level and corresponding asset value decrease.