When a Perpetual System Is Used and Transportation Cost Is

question 26

Multiple Choice

When a perpetual system is used and transportation cost is incurred to obtain inventory,the transportation cost is:

• A)added to Inventory.
• B)reported as Selling,General & Administrative Expense on the income statement.
• C)reported as a contra-account that is subtracted from sales revenue when determining net sales.
• D)deducted from the Cost of Goods Sold when determining gross profit.