The Cost of an Inventory Item Includes Its Invoice Price

question 139

True/False

The cost of an inventory item includes its invoice price plus any added or incidental costs necessary to put it in a place and condition for sale.

---

Definitions:

Drawing Account

An account that tracks the money or goods withdrawn from a business by its owners for personal use.

Capital Account

A financial statement that shows the changes in ownership interest of a company over a period.

Noncumulative

Pertains to dividends or other rights that do not accumulate if not paid or exercised in the period they are due.

Dividends in Arrears

Unpaid dividends on cumulative preferred stock which must be paid out before any dividends can be distributed to common stockholders.