Which of the Following Items Will Increase Inventoriable Costs for the Buyer

question 147

Multiple Choice

Which of the following items will increase inventoriable costs for the buyer of goods?

• A)Purchase returns and allowances granted by the seller
• B)Purchase discounts taken by the purchaser
• C)Freight charges paid by the seller
• D)Freight charges paid by the purchaser

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Definitions:

Gross Profit to Cost

A financial ratio that measures the profitability of a company by comparing its gross profit to its total cost of goods sold.

Gross Profit to Sales

A financial ratio that determines the percentage of gross profit relative to sales revenue, indicating the efficiency of production and pricing.

Theoretical Assumptions

Foundational ideas or principles assumed to be true without immediate empirical testing, used as the basis for further theory development or analysis.

Conservatism

An accounting principle that advises to exercise caution and report expenses and liabilities as soon as possible, but to delay the recognition of revenues and assets.