Many Companies Assign Only the Net Invoice Price for Merchandise

question 119

Multiple Choice

Many companies assign only the net invoice price for merchandise to inventory and cost of goods sold.All other costs, including transportation and other costs of bringing merchandise to the place of business, are charged to expense of the period in which they are incurred.Which accounting principle or concept is applied in this example?

• A)Historical cost
• B)Matching
• C)Cost/Benefit
• D)Conservatism

---

Definitions:

Public Property

Land or assets owned by the government and accessible to the public for use or enjoyment, including parks, libraries, and public buildings.

Private Property

Land or possessions owned by individuals or entities and not by the government or public.

Public Use

The use of land or resources for the benefit and welfare of the general public.

Universal Declaration

Refers typically to the Universal Declaration of Human Rights, a historic document adopted by the United Nations General Assembly that outlines the rights and freedoms to which all human beings are entitled.