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:

Contractual Obligations

Duties that a party is legally required to perform according to the terms of a contract.

Economic Loss

Financial damages not directly resulting from physical harm to a person or property, such as lost profits or earning capacity.

Ethical Competition

The practice of competing fairly and ethically within a market, adhering to moral standards and avoiding practices that harm consumers or competitors.

Physical Contact

The act of touching or being in direct contact with someone or something.