If a Purchaser Using a Perpetual Inventory System Pays the Transportation

question 97

Multiple Choice

If a purchaser using a perpetual inventory system pays the transportation costs, then the

• A) Inventory account is increased.
• B) Inventory account is not affected.
• C) Freight-Out account is increased.
• D) Delivery Expense account is increased.

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Definitions:

Void

A term describing a contract or legal action that is null, having no legal force or effect from the outset.

Ratification

The formal approval of an agreement or treaty by authoritative body, making it officially valid.

Writing

The process of using symbols, such as letters and characters, to communicate thoughts and ideas in a readable form.

Unlimited Liability

A legal status where business owners are personally responsible for all the debts and liabilities of the business.