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.

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Definitions:

Symbolic Form

An expression or representation that uses symbols to convey ideas or concepts.

Components

The individual parts or elements that make up a whole system or compound.

Connective

A word or phrase in language that connects clauses or sentences, or a logical operator that joins propositions.

Coherent

Logically connected or consistent; in physics, waves having a constant phase relationship.