Freight Costs Paid by a Seller on Merchandise Sold to Customers

question 137

Multiple Choice

Freight costs paid by a seller on merchandise sold to customers will cause an increase

• A) in the selling expense of the buyer.
• B) in operating expenses for the seller.
• C) to the cost of goods sold of the seller.
• D) to a contra-revenue account of the seller.

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Definitions:

Accumulated Depreciation

The cumulative depreciation of an asset up to a single point in its life, reflecting its decrease in value over time.

Taxable Gain

The profit that is subject to taxation, realized from the sale of an asset or investment.

Deductible Loss

A financial loss that can be subtracted from income for tax purposes, reducing the taxable income.

Machinery

Physical devices or tools that are used in manufacturing or industrial processes.