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

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Definitions:

Free Nerve Endings

Sensory receptor endings that are found in nearly all body tissues and are capable of detecting pain, temperature, and touch stimuli.

Anosmia

The loss of the sense of smell, either total or partial.

Sense of Smell

The ability to detect and identify volatile substances through olfactory receptors in the nose.

Vertigo

A sensation of spinning or dizziness, often caused by issues within the inner ear or the vestibular nerve.