When a Perpetual System Is in Used and Transportation Cost

question 68

Multiple Choice

When a perpetual system is in 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.

---

Definitions:

Time Compression

The acceleration of societal processes such that events happen faster and are experienced in shorter time frames.

On-demand Music

A service or platform that allows users to listen to music any time, typically via the internet, without needing to download files.

Spotify

A digital music service that provides access to millions of songs, podcasts, and videos from artists all over the world.

Apple Music

A music and video streaming service developed by Apple Inc., allowing users to listen to their music library and access a vast library of songs and playlists.