To Calculate the Total Cost of a Merchandise Purchase, the Invoice

question 68

Multiple Choice

To calculate the total cost of a merchandise purchase, the invoice account must be adjusted for which of the following?

• A) Any discounts given to a purchaser by a supplier
• B) Any returns and allowances received from a supplier
• C) Any freight costs paid by a purchaser
• D) Any taxes or other costs necessary to make the goods ready for sale
• E) All of the above

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Definitions:

Generally Accepted Accounting Principles

A collection of commonly-followed accounting rules and standards for financial reporting that is adopted by most countries.

ASPE

Accounting Standards for Private Enterprises, which are the accounting standards used by private companies in Canada.

Earnings Per Share

A measure of a company's profitability that calculates how much money shareholders would receive for each share they own if all profits were distributed.

Going Concern Assumption

A principle in accounting that assumes a company will continue its operations into the foreseeable future and is not expected to liquidate.