In a Perpetual Inventory System,paying Transportation Charges on Goods Purchased

question 150

Multiple Choice

In a perpetual inventory system,paying transportation charges on goods purchased FOB shipping point would have which of the following effects?

• A)decrease operating expenses.
• B)increase selling,general,and administrative expenses.
• C)decrease cost of goods sold.
• D)increase inventory.

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Definitions:

Tax Rate

The percentage at which an individual or corporation is taxed by the government on income or profits.

M x V = P x Y

The equation representing the quantity theory of money, where M is the money supply, V is the velocity of money, P is the price level, and Y is the real output.

Price Level

The average of current prices across the entire spectrum of goods and services produced in the economy, indicative of inflation or deflation.

Real Value

The value of an item or currency adjusted for inflation, showing its true purchasing power over time.