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:

Investor's Choice

The selection made by an investor regarding where, how, and in what to invest their money, based on factors like risk, return, and personal objectives.

Risk

The potential for losing something of value or the uncertainty regarding the outcome of an action, often associated with the potential for financial loss.

Expected Return

The probable gain or loss one expects from an investment, taking into account both the probability and the magnitude of returns.

Stock Prices

represent the current market value of a share of a company's stock, influenced by investor demand, company performance, and market conditions.