In a Spin-Off the Entity Being Separated from the Parent

question 7

True/False

In a spin-off the entity being separated from the parent company often is assigned specific debt attributable to it as part of the sale process.

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Definitions:

Freight Cost

The charge incurred for transporting goods via air, land, or sea.

Periodic Inventory System

An inventory accounting method where the inventory count and the cost of goods sold are determined at the end of an accounting period.

Merchandise Inventory

Goods or products that a company holds with the intention of selling them to customers for a profit.

Freight In

The cost associated with transporting goods from the supplier to the buyer, which is often added to the purchase cost of inventory.